hmt ltd (crd)(050915) · no. 4 of the accompanying notice dated september 3, 2015. item no - 4 shri...

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HMT LIMITED (CIN No: L29230KA1953PLC000748) Regd. Office: HMT Bhavan, No.59, Bellary Road, Banaglore-560032 Ph:080 – 23330333, Fax:23339111, e-mail:[email protected] Notice is hereby given that the 62 nd Annual General Meeting of HMT Limited will be held on Wednesday, September 30, 2015 at 10.30 A.M. at the Registered Office of the Company at No.59, Bellary Road, Banaglore-560 032 to transact the following Business: ORDINARY BUSINESS 1. To receive, consider and adopt: a. The Audited Standalone Financial Statements for the financial year ended March 31, 2015 and the reports of the Directors’ and Auditors’ thereon; b. The Audited Consolidated Financial Statements for the financial year ended March 31, 2015 and the report of Auditors’ thereon; 2. To appoint a director in place of P. Sivarami Reddy (DIN 02678958), who retires by rotation and being eligible has offered himself for re-appointment. 3. To authorize the Board of Directors to fix the remuneration of the Auditors’ for the year 2015-16. SPECIAL BUSINESS: 4. To consider and, if thought fit, to pass with or without modification, the following resolution as an Ordinary Resolution: “RESOLVED THAT Shri Vishvajit Sahay (DIN. 06840620), who was appointed as an Additional Director pursuant to Article 67(4) of the Articles of Association of the Company read with Section 161 (1) of the Companies Act, 2013 w.e.f. 03.02.2015 to hold office upto the date of this Annual General Meeting and in respect of whom, the Company has received a notice in writing, pursuant to the provisions of Section 160(1) of the Companies Act, 2013, be and is hereby appointed as a Director of the Company not liable to retire by rotation.” By Order of the Board (Subash B. K.) Company Secretary Date: 03-09-2015 Place: Bangalore

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Page 1: HMT Ltd (CRD)(050915) · No. 4 of the accompanying Notice dated September 3, 2015. ITEM NO - 4 Shri Vishvajit Sahay (DIN. 06840620), was appointed as Government Nominee Director of

HMT LIMITED

(CIN No: L29230KA1953PLC000748)

Regd. Office: HMT Bhavan, No.59, Bellary Road, Banaglore-560032

Ph:080 – 23330333, Fax:23339111, e-mail:[email protected]

NOTICE

Notice is hereby given that the 62nd Annual General Meeting of HMT Limited will be held on Wednesday,

September 30, 2015 at 10.30 A.M. at the Registered Office of the Company at No.59, Bellary Road,

Banaglore-560 032 to transact the following Business:

ORDINARY BUSINESS

1. To receive, consider and adopt:

a. The Audited Standalone Financial Statements for the financial year ended March

31, 2015 and the reports of the Directors’ and Auditors’ thereon;

b. The Audited Consolidated Financial Statements for the financial year ended March 31,

2015 and the report of Auditors’ thereon;

2. To appoint a director in place of P. Sivarami Reddy (DIN 02678958), who retires by rotation

and being eligible has offered himself for re-appointment.

3. To authorize the Board of Directors to fix the remuneration of the Auditors’ for the year

2015-16.

SPECIAL BUSINESS:

4. To consider and, if thought fit, to pass with or without modification, the following resolution

as an Ordinary Resolution:

“RESOLVED THAT Shri Vishvajit Sahay (DIN. 06840620), who was appointed as an

Additional Director pursuant to Article 67(4) of the Articles of Association of the Company

read with Section 161 (1) of the Companies Act, 2013 w.e.f. 03.02.2015 to hold office

upto the date of this Annual General Meeting and in respect of whom, the Company has

received a notice in writing, pursuant to the provisions of Section 160(1) of the Companies

Act, 2013, be and is hereby appointed as a Director of the Company not liable to retire by

rotation.”

By Order of the Board

(Subash B. K.)

Company Secretary

Date: 03-09-2015

Place: Bangalore

Page 2: HMT Ltd (CRD)(050915) · No. 4 of the accompanying Notice dated September 3, 2015. ITEM NO - 4 Shri Vishvajit Sahay (DIN. 06840620), was appointed as Government Nominee Director of

Notes:-

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED

TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND

THE PROXY NEED NOT BE A MEMBER OF THE COMPANY. A PERSON

APPOINTED AS PROXY SHALL ACT ON BEHALF OF SUCH MEMBER OR

NUMBER OF MEMBERS NOT EXCEEDING FIFTY AND HOLDING IN

AGGREGATE NOT MORE THAN TEN PERCENT OF THE TOTAL SHARE

CAPITAL OF THE COMPANY CARRYING VOTING RIGHTS. HOWEVER, AS PER

RULE 19(2) PROVISO OF THE COMPANIES (MANAGEMENT AND

ADMINISTRATION) RULES, 2014, A MEMBER HOLDING MORE THAN 10%

OF TOTAL SHARE CAPITAL OF THE COMPANY CARRYING VOTING RIGHTS

MAY APPOINT A SINGLE PERSON AS PROXY AND SUCH PERSON SHALL NOT

ACT AS PROXY FOR ANY OTHER PERSON OR SHAREHOLDER.

2. Corporate Members are requested to send a duly certified copy of the Board Resolution/ Power of

Attorney authorizing their representative to attend and vote on their behalf at the Annual General

Meeting.

3. Relevant Explanatory Statement pursuant to Section 102(1) of the Companies Act, 2013, in respect

of Special Business, as set out above is annexed hereto.

4. Brief resume of each of the Directors proposed to be appointed/re-appointed, nature of their expertise

in specific functional areas, names of companies in which they hold Directorships and memberships/

chairmanships of Board Committees, Shareholding and relationships between directors inter-se as

stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, are provided in the

Corporate Governance Report forming part of the Annual Report and also accompanying this notice.

5. Pursuant to Section 139 (5) read with Section 142 (1) of the Companies Act, 2013, the Auditors of

a Government Company are appointed by the Comptroller and Auditor General (C&AG) of India

and their remuneration is fixed by the Company in the Annual General Meeting. The General Meeting

may authorize the Board to fix up an appropriate remuneration of Auditors for the year 2015-16 as

may be deemed fit by the Board.

6. As per Section 108 of the Companies Act, 2013 read with Rule 20 of the Companies (Management

and Administration) Rules, 2014 and Clause 35B of the Listing Agreement, the Company is pleased

to provide the facility to members to exercise their right to vote by electronic means through M/s

Karvy Computershare Private Limited. The members, whose names appear in the Register of Members

/ list of Beneficial Owners as on August 28, 2015 i.e. the cut off date taken by the Company for

dispatch of Annual Report and the Notice (including notice for e-voting) calling the Annual General

Meeting will be eligible to vote for the purpose of E-voting / AGM. The e-voting period will commence

from Sunday, September 27, 2015 at 9.00 A.M. and will end on Tuesday, September 29, 2015

at 6.00 P.M. The e-voting module will be disabled on September 29, 2015 after 6.00 P.M.. The

members desiring to vote through electronic mode may refer to the detailed procedure on e-voting

sent separately alongwith necessary user id and password. Once the vote on a resolution is cast by

the shareholder, the shareholder shall not be allowed to change it subsequently. The voting right of

Page 3: HMT Ltd (CRD)(050915) · No. 4 of the accompanying Notice dated September 3, 2015. ITEM NO - 4 Shri Vishvajit Sahay (DIN. 06840620), was appointed as Government Nominee Director of

shareholders shall be in proportion to their share in the paid up equity share capital of the Company

as on the cut-off date i.e. 28.08.2015.

7. In case of Joint holders attending the Meeting only such joint holder who is higher in the

order of names will be entitled to vote.

8. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent

Account Number (PAN) by every participant in securities market. Members holding shares in electronic

form are, therefore, requested to submit their PAN to their Depository Participants with whom they

are maintaining their demat accounts. Members holding shares in physical form can submit their PAN

to the Company/Karvy.

9. The Share Transfer Books and Register of Members of the Company shall remain closed

from 22.09.2015 to 30.09.2015 (Both days inclusive) in connection with the AGM.

10. The Company has appointed Shri D. Venkateswarlu to act as a scrutinizer, to scrutinize the e-voting

process in a fair and transparent manner. The Scrutinizer shall within a period not exceeding three (3)

working days from the conclusion of the e-voting period unblock the votes in the presence of at least

two (2) witnesses not in the employment of the Company and make a Scrutinizer’s Report of the

votes cast in favour or against, if any, forthwith to the Chairman of the Company. The results shall be

declared on or after the Annual General Meeting of the Company. The results declared along with the

Scrutinizer’s Report shall be available on the Company’s website within two (2) days of passing of the

resolution at the Annual General Meeting of the Company and will accordingly be communicated to

the stock exchanges.

11. Proxies duly stamped and signed must be deposited at the Registered Office of the Company not less

than 48 hours before the commencement of the meeting.

12. None of the Directors of the Company are related to each other in any way.

Members are requested to register their email-ids at the earliest to support the Company’s Green

initiative and for receiving all communications including Annual Report, Notices, Circulars

etc. from the Company electronically. In case of shareholders holding shares in electronic form,

details may be sent to their respective DP. Shareholders holding shares in physical form are

requested to send email details to our RTA, M/s Karvy Computershare Private Limited.

EXPLANATORY STATEMENT PURSUANT TO SECTION 102(1) OF THE COMPANIES ACT, 2013

The following explanatory statement sets out the material facts relating to the business mentioned in Item

No. 4 of the accompanying Notice dated September 3, 2015.

ITEM NO - 4

Shri Vishvajit Sahay (DIN. 06840620), was appointed as Government Nominee Director of the Company by

the President of India vide letter F.No.5(8)/2010-P.E.X dated February 3, 2015 and accordingly was appointed

as an Additional Director pursuant to Article 67(4) of the Articles of Association of the Company read with

Section 161 (1) of the Companies Act, 2013 w.e.f. 03.02.2015 holds Office upto the date of this Annual

General Meeting.”

Page 4: HMT Ltd (CRD)(050915) · No. 4 of the accompanying Notice dated September 3, 2015. ITEM NO - 4 Shri Vishvajit Sahay (DIN. 06840620), was appointed as Government Nominee Director of

Brief Resume of Directors proposed for appointment / re-appointment as per listing agreement

[(clause 49 VIII(E) (1)(a)

SHRI VISHVAJIT SAHAY

Shri Vishvajit Sahay, aged 48 years was inducted as Part-Time Official Director on the Board of HMT w.e.f

February 3, 2015. Shri Vishvajit Sahay is a IDAS 1990 batch officer. He has worked in various capacities as

Director (Films), Ministry of Information and Broadcasting, Finance Manager in Acquisition Wing, Ministry of

Defence, Sr. Dy. Controller General of Defence Accounts (Admn), Joint Controller General of Defence Accounts

and at present he holds a post of Joint Secretary, Department of Heavy Industry.

Shri Vishvajit Sahay does not hold any shares in HMT.

SHRI P. SIVARAMI REDDY

Shri P.Sivarami Reddy aged 57 years was inducted as Director (Operations & Finance) on the Board of HMT

with effect from 26.05.2014. A Mechanical Engineer graduate with Master in Business Administration in

Marketing Management has served in various capacities for nearly 3 decades in different Units of HMT

Group. Before joining HMT he worked in two private companies in Hyderabad from 1980 to 1983.

Shri P.Sivarami Reddy does not hold any shares in HMT Ltd.

As per requirement of Section 160 of the Companies Act, 2013, the Company has received a Notice in

writing, proposing candidature of Shri Vishvajit Sahay (DIN. 06840620) for the Office of Director of the

Company.

Shri Vishvajit Sahay if appointed, shall not be liable to retire by rotation.

Shri Vishvajit Sahay is not disqualified from being appointed as a Director in terms of Section 164 of the

Companies Act. 2013.

Except Shri Vishvajit Sahay (DIN. 06840620), being an appointee, none of the Directors or Key Managerial

Personnel of the Company and their relatives is concerned or interested, financial or otherwise, in the resolution

set out at Item No - 4.

The Board recommends the resolution for approval of the Shareholders.

By order of Board of Directors,

(Subash B.K)

Company Secretary

Place: Bangalore

Date: 03.09.2015

Page 5: HMT Ltd (CRD)(050915) · No. 4 of the accompanying Notice dated September 3, 2015. ITEM NO - 4 Shri Vishvajit Sahay (DIN. 06840620), was appointed as Government Nominee Director of

IMPORTANT COMMUNICATION TO MEMBERS

Across the world, there is an increasing focus on doing our bit to help save our environment from further degradation. The Green initiative is an

attempt to reduce consumption of paper by making use of electronic communication, in turn prevent deforestation and thereby contribute to a cleaner

and healthier environment. It will also ensure prompt receipt of communication and avoid losses in transit.

The Ministry of Corporate Affairs has taken a �Green Initiative in Corporate Governance� by allowing paperless compliances by the Companies and

has issued circulars stating that service of notice / documents including Annual Report can be sent by e-mail to its members. To support this initiative,

we had requested our members last year to register their email-id with their Depository Participant / Company�s Registrar & Share Transfer Agents

which will enable us to provide shareholder communication in electronic form.

In response to our request, several Members have expressed their support to the initiative, by registering their email-id and we express our sincere

appreciation of their gesture. It is once again requested that Members who have not registered their email addresses, so far, to register their email-

id with their Depository Participant / Company�s Registrar & Share Transfer Agents to support this green initiative of the Government in full measure.

Members who hold shares in physical form are requested to fill the appropriate information in the form below and register the same with Karvy

Computershare Private Limited (Unit � HMT Limited), No. 46, Avenue 4, Street No. 1, Banjara Hills, Hyderabad � 500 034.

We are sure that you appreciate the Green Initiative taken up by the Ministry of Corporate Affairs and trust that you will support your Company�s

desire to participate in it.

HMT LIMITEDNo. 59, Bellary Road, Bangalore - 560 032

FORM FOR REGISTERING E-MAIL ID FOR RECEIVING

DOCUMENTS/NOTICES BY ELECTRONIC MODE

In terms of Circular No. 17/2011 dated April 21, 2011 issued by Ministry of Corporate Affairs,

Government of India

Name of the Shareholder

(In Block letters)

including Joint holders, if any

Registered Folio Number/DP 1D/CL ID

Nos.

Email- ID

Signature of the Shareholder

$$

Page 6: HMT Ltd (CRD)(050915) · No. 4 of the accompanying Notice dated September 3, 2015. ITEM NO - 4 Shri Vishvajit Sahay (DIN. 06840620), was appointed as Government Nominee Director of

HMT LIMITEDNo. 59, Bellary Road, Bangalore - 560 032

I, hereby record my presence at the 62nd Annual General Meeting at the Registered Office of the Company at

10.30 a.m. on Wednesday, September 30, 2015.

Name of the Attending Member ....................................................................................................................................

(in Block Letters)

DP. Id Members’ Folio Number

Client Id No. of Shares

Name of Proxy .............................................................................................................................................................

(in Block Letters, to be filled in if the Proxy attends instead of the Member).

Member’s/Proxy’s Signature

To be signed at the time of handing over this slip.

(Tear here)

ATTENDANCE SLIP

HMT LIMITEDNo. 59, Bellary Road, Bangalore - 560 032

PROXY FORM

DP. Id Members’ Folio Number

Client Id No. of Shares

I / We .........................................................................................................................................................................

of ................................................................................................................................................................................

being a Member/Members of HMT Limited hereby appoint ...................................................................................

.................................................................................... of ........................................................................................

or failing him ..............................................................................................................................................................

of ...............................................................................................................................................................................

or failing him .............................................................................................................................................................

as my/our Proxy in my/our absence to attend and vote for me/us, and on my/our behalf, at the 62nd Annual General

Meeting of the Company, to be held at 10.30 a.m. on the Wednesday, September 30, 2015 and at any adjournment

thereof.

Signed by the said

Affix

One Rupee

Revenue

Stamp

Note : The Proxy Form must be deposited at the Registered Office of the Company at No. 59, Bellary Road,

Bangalore 560 032, not less than 48 hours before the time for holding the meeting.

$$

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1

HMT LIMITED

CONTENTS

Board of Directors ............................................................................................................................. 2

Performance Highlights ....................................................................................................................... 3

Directors’ Report ............................................................................................................................. 4

Management Discussions and Analysis ............................................................................................ 11

Annexure to the Director Report ........................................................................................................ 18

Secretrial Audit Report ....................................................................................................................... 31

Certficate on Corporate Governance ................................................................................................. 34

CEO & CFO Certificate ..................................................................................................................... 35

Independent Auditors’ Report ............................................................................................................. 36

Comments of C & AG ........................................................................................................................ 45

Significant Accounting Policies .......................................................................................................... 46

Balance Sheet ........................................................................................................................... 49

Profit & Loss Account ........................................................................................................................ 50

Notes Forming Part of Statement of Accounts .................................................................................. 51

Cash Flow Statement ........................................................................................................................ 73

Consolidated Financial Statements ................................................................................................... 75

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2

BOARD OF DIRECTORS

Shri. S. Girish Kumar Chairman & Managing Director

Shri. S. K. Bahri Director

Shri. Vishvajit Sahay Director

Shri. P. Sivarami Reddy Director (Operations)

CHIEF VIGILANCE OFFICER

Shri. R. N. Lakshmi Narasimha Chief Vigilance Officer

COMPANY SECRETARY

Shri Subash B. K. Company Secretay

STATUTORY AUDITORS

M/s DOKANIA S KUMAR & CO.

Chartered Accountants

BANKERSUCO Bank

Punjab National Bank

REGISTERED OFFICE“HMT BHAVAN”

59, Bellary Road

Bangalore - 560 032

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3

2014-15 2013-14 2012-13 2011-12 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06

OPERATING STATISTICS

Sales 6147 7971 10095 16112 20086 19164 16098 17108 22729 24833

Other Income * 3247 30518 4756 4658 5475 1078 1425 1267 11458 5621

Materials 3570 6319 5365 12118 13746 12083 10596 14064 15125 17461

Employee Costs 9978 9030 7070 7499 8371 6762 6367 6472 6106 5813

Other Costs 2837 11754 4090 2906 3140 3252 4811 4080 8351 5868

Depreciation 271 340 355 440 387 392 340 299 321 393

Earnings before Interest (7821) 12016 (4135) 735 (16) (3323) (5664) (4466) 3639 900

Interest 1836 1434 10403 8955 7908 1968 1234 131 (409) (455)

Earnings/(Loss) before Tax (9657) 10582 (14538) (8220) (7924) (5291) (6898) (4597) 4048 1355

Taxation (net off withdrawal/refunds) - 1861 - - - - 181 (130) (1382) 28

Net Earnings (9657) 8721 (14538) (8220) (7924) (5291) (7079) (4467) 5430 1327

FINANCIAL POSITION

Net Fixed Assets 2400 2831 3159 3507 3868 4028 4094 3751 3342 3437

Current Assets 64307 67742 68604 70619 65557 72668 71078 73167 112729 111417

Current Liabilities & Provisions 25217 21881 26928 25701 24309 21437 19445 19653 20914 20366

Working Capital 39090 45861 41676 44918 41248 51231 51633 53514 91815 91051

Capital Employed 41490 48692 44835 48425 45116 55259 55727 57265 95157 94488

Investments 76390 76390 76556 76556 76556 76556 76571 76571 76571 7801

Miscellaneous Expenditure - - - - - - 29 197 380 3845

Borrowings 13846 11246 82349 71401 59871 62091 57312 52098 85553 92742

Net Worth 104034 113838 39043 53581 61800 69724 74986 81897 86181 8146

OTHER STATISTICS

Capital Expenditure 8 12 7 81 227 327 681 707 230 556

Internal Resources Generated (9386) 10922 (14183) (7780) (7537) (4899) (6739) (4168) 5751 1720

Working Capital Turnover Ratio 0.16 0.17 0.24 0.36 0.49 0.37 0.31 0.32 0.25 0.27

Current Ratio 2.55 3.10 2.55 2.75 2.70 3.39 3.66 3.72 5.39 5.47

Return on Capital(%) (17.34) 25.70 (8.87) 1.57 (0.03) (5.99) (10.03) (5.86) 3.84 0.93

Employees (Nos) 1421 1434 1442 1699 1904 2088 2205 2296 2383 2429

Capita Sales 4.33 5.56 7.00 9.48 10.55 9.18 7.30 7.45 9.54 10.22

* Includes Extra Ordinary /Exceptional Items

PERFORMANCE HIGHLIGHTS(` in Lakhs)

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4

DIRECTORS’ REPORT

To

The Members,

HMT Limited

Bangalore

Dear Members,

The Board of Directors have pleasure in presenting the 62nd

Annual Report on the Business & Operations of your

Company and Annual Financial Statements of the Company

for the financial year 2014-15 along with the Auditors’ Report

thereon. The Comments of the Comptroller & Auditor

General of India are attached to this Report.

Financial summary / Performance of the

Company (Standalone)

(` in Crore)

Particulars 2014-15 2013-14

Gross Revenue from Operations 61.47 79.71

Profit Before Depreciation andFinance Costs (75.48) (150.36)

Depreciation 2.71 3.40

Gross Profit/(Loss) (78.19) (153.76)

Finance Cost 18.36 14.34

Net profit before exceptionalItems and PPA (96.55) (168.10)

Add : Exceptional Items - 275.00

Less : Prior Period Adjustments 0.02 1.08

Net Profit before Tax (96.57) 105.82

Provision for Tax - 18.61

Net Profit After Tax (96.57) 87.21

Profit/Loss carried forward toBalance Sheet (96.57) 87.21

BUSINESS SCENARIO

India’s economic growth rate in the current financial year

has recovered to 7.3 per cent, against 6.9 percent of the

previous year. The growth of Gross Value Added (GVA) at

basic prices for agriculture & allied sectors, industrial sector

and services sector are estimated at 0.2 per cent, 6.1 per

cent and 10.2 per cent respectively in 2014-15 as compared

to the corresponding rates of 3.7 per cent, 4.5 per cent and

9.1 per cent respectively in 2013-14.

Overall growth in the Index of Industrial Production (IIP)

was 4.1 per cent during April 2015 as compared to 3.7 per

cent in April 2014. In the year 2014-15, IIP growth was 2.8

per cent as compared to (-) 0.1 per cent in the previous

year. Eight core infrastructure industries registered a

contraction of 0.4 per cent in April 2015 as compared to

growth of 5.7 per cent in April 2014. In the year 2014-15,

these sectors grew by 3.6 per cent as compared to 4.2 per

cent growth in the previous year.

The Growth in gross fixed capital formation (fixed investment)

increased from 3 percent to 4.1 percent in 2014-15.Gross

fixed capital formation (GFCF) as a percentage of GDP

declined from 29.7 per cent in 2013-14 to 28.07percent in

2014-15

Agriculture is the primary source of livelihood for about 58

per cent of India’s population. Agriculture and its allied

services grew at a CAGR of 2.8 per cent from 2007 to 2014.

Rainfall has been excess/normal in 24 sub divisions as

compared to 8 during the corresponding period last year

accordingly to the advanced estimates; agriculture and allied

sector recorded a growth of 3.6 per cent in 2014 and has

fallen short of the 4 per cent growth target

The Performance of two key sectors Capital Goods and

Manufacturing has shown positive trend during financial year

2014-15. The Indian automobile industry showed 8.6 percent

growth in sales ending the fiscal year 2015 on a positive

note which in turn impacts optimistically on the performance

of machine tool industry.

Operating Results

On the Company’s main business portfolio of Tractors, the

market indicators reveal that the industry recorded de-

growth of 12% in terms of quantity. Your Company had to

face severe pressure on performance during the year due

to lack of working capital. Your Company recorded a

Production of ` 53.66Crore (1078Nos. of Tractors) as

against ` 74.11 Crore (1546 Nos. of Tractors), in the

previous year, and Sales of ` 60.28 Crore (1127 Nos. of

Tractors) compared to 78.45 Crore (1488 Nos. of Tractors)

in the previous year.

HMT Group along with its Subsidiaries achieved an

aggregate Production of ` 252 Crore and Sales of ` 277

Crore for the year 2014-15.

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5

Future Outlook

Tractor Industry in India has shown a negative growth trend

for the last six months of 2014-15 and has ended with a

cumulative negative growth of 12%.

No major relief from the current downswing is expected in

the next three quarters of this financial year. Tractor demand

will depend upon monsoon pattern and Govt. of India’s

Minimum Support Price (MSP) for farm products.

Growth outlook stands at 8 – 9 % CAGR for Tractor Industry

over the next five years as per Tractor Manufacturers

Association (TMA).

Tractor sales are expected to grow by 8-9 per cent CAGR,

over next five years, with falling replacement cycles, stable

farm incomes, and increased focus of the government on

agricultural and rural development.

Two categories 31-40 HP and 41-50 HP sub segments of

Tractors continue to constitute bulk of the tractor market

mainly driven by larger market, suitability of applications

and relatively better affordability of the mix. This mix to

remain largely unaffected over the 18-24 month timeframe

though improving mechanization and increasing exports from

India are likely to aid in enhancing the volume share of sub

30 HP and >51 HP tractors respectively over a longer

horizon.

Monsoon forecasts suggest that rain fall in central India

should be above normal at 105-110%. Rainfall in south and

east and north-east India, too, should be normal. There is

overwhelming evidence to suggest that monsoon this year

will most probably be normal and is hopeful that Tractor

sales may pick up only in second half of the year subject

to monsoon. Tractor industry may accordingly see a growth

phase once again.

The other trend that is evident is increased use of tractors

in infrastructure and construction sectors which has led to

a huge growth in purchase of higher HP tractors. High growth

in this segment is expected to continue because of the

following:

• Replacement demand turning towards higher HP

tractors.

• Increased usage of tractors for non-agricultural

applications across India

The Tractor Industry will continue to grow in the year 2015-

16 due to thrust of Govt. on Agriculture and infrastructure.

The growth drivers of Tractor Industry such as boost in rural

economy, increased focus on agriculture and rural

development, credit availability, shorter replacement cycle,

several policy initiatives by the Government, etc., are aiding

the growth trends.

The Tractor Business Group of your Company has already

initiated a host of measures towards performance

corrections, improvements and further growth. Appointment

of new Distributors and Dealers in potential areas/territories,

up gradation of the tractor engines for compliance to new

emission norms for all models of tractors, entering into

MoU’s with Banks/Financing Agencies for priority loan

sanction/retail financing for the purchase of HMT Tractors,

dynamic business strategies, improved collections on

account of price revision and incentive scheme etc., which

are expected to yield results in the current financial year.

The future plans of your Company envisages plant

modernization and technology Upgradation & Manpower

restructuring which will contribute to better productivity

hence the efficiency and give a thrust to the growth trends

in the coming years.

DIVIDEND & PROVISIONS

Owing to the losses incurred during the year, the Directors

are unable to recommend any dividend on the paid up equity

share capital of the Company.

Share Capital

The Authorised Share Capital of the Company is ` 2100

Crore and Paid up Share Capital is 1420.35 Crore

Fixed Deposits:

The Company did not accept any fixed deposits during the

year, and as such there was no outstanding Fixed Deposits

at the beginning / end of the year.

Enterprise Risk Management:

Establishment of Risk Management System in terms of

Clause 49(VI) of the Listing Agreement and the provisions

of the Companies Act, 2013 is under process.

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Particulars of Employees:

There were no employees of the Company who received

remuneration in excess of the limits prescribed under Rule

5 of the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014.

SUBSIDIARY COMPANIES

HMT Machine Tools Limited

The Subsidiary achieved Sales of ` 172.15 Crore during

the year against ` 159.02 Crore in the previous year.

Production attained is 181.50 Crore as against 155.56

Crore, in the previous year. Net loss reported is ` 134.94

Crore during the year 2014-15 against a loss of 52.66 Cr.

in previous year.

The Subsidiary has implemented the revival plan proposals

and plant up-gradation. The Subsidiary is also pursuing

with various agencies for extending the reliefs and

concessions sanctioned by the BIFR under the

Rehabilitation Scheme. Some of these Parties including

the Consortium of Banks have preferred appeals against

the reliefs and concessions sanctioned by the BIFR, which

is being contested by the Subsidiary.

During 2013-14 BRPSE reviewed the progress of Revival

Plan Implementation and recognised the need for interim

measures to propel the growth of HMT Machine Tools

Limited which will augur the momentum. Accordingly

recommendation forwarded to the Government was

approved and is under implementation. Infusion of 75 Cr.

Working Capital will have a positive effect on the future

performance.

HMT Watches Limited

This Subsidiary could not show significant improvement in

performance during the year under review. Major factors

affecting the performance of this Subsidiary were paucity

of working capital, erosion of trade channel and high cost

of borrowings. This Subsidiary could achieve a Sales of

` 8.13 Crore including sales through e-portals and

Production of ` 2.69 Crore during the year under review.

The Net Loss for the year stood at 259.20 Crore.

HMT Chinar Watches Limited

The performance of this Subsidiary could not be sustained

at optimum levels due to working capital constraints for

production and as majority of the employees have been

separated on VRS leaving about 32 employees at Srinagar

and Jammu Units of the Subsidiary. Under these

circumstances, the Subsidiary’s Sales was limited to

` 0.90 Crore during the year with NIL Production for the

year. In view of the virtual non operating levels, the

Subsidiary incurred a Net loss of ` 49.05 Cr.

HMT (International) Limited

The Subsidiary achieved a turnover of 33.40 Crore during

the year 2014-15 as against 25.08 Crore recorded in the

previous year 2013-14. The Order procurement during the

year is ` 82.08 Crore as against ` 22.23 Crore achieved

in the previous year. Continuing the trend of achieving profits,

Subsidiary reported Profit Before Tax (PBT) of 1.66 Crore

achieved against ` 0.50 Crore reported in previous year.

The Subsidiary has maintained its consistent dividend

payment record and has recommended a dividend of 20%

for the year 2014-15 on its Paid-up equity share capital

HMT Bearings Limited

During the year under review, the Subsidiary was able to

achieve a Sales of ` 14.75 Crore, against the Previous

Year’s Sales of ` 14.36 Crore. In terms of Production the

Company was able to achieve 14.20 Crore compared to

the Previous Year’s Production of ` 15.04 Crore. Profit

Before Tax registered (-)17.78 Cr. against (-)15.98 Cr.

reported during 2013-14.

ASSOCIATE /JOINT VENTURE COMPANY

SUDMO-HMT Process Engineers (India) Limited

This Joint Venture Company could not transact any

business during the year under review. For the financial

year 2014-15, this Company showed a Profit after tax of

` 1.06 Lakhs only on account of the interest income of

` 3.71 Lakhs, on the fixed deposits kept with the Banks.

Gujarat State Machine Tools Corporation Ltd

This Joint Venture Company between HMT and GIIC Ltd

has discontinued its operations since long. It is therefore

proposed to divest from this Associate Company jointly with

the JV Partner. The process of disinvestment from this

Company, is under consideration by the Company in

consultation with the JV Partner.

CONSOLIDATED FINANCIAL STATEMENTS

As required under the Listing Agreement, Consolidated

Financial Statements of the Company along with that of

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the Subsidiaries for the financial year 2014-15, conforming

to the applicable Accounting Standards, are attached to

this Report along with the Auditors’ Report on the same.

The financial information of these subsidiary Companies

have been furnished as part of the Consolidated Balance

Sheet of the Company. The annual accounts and other

detailed information of each of the Subsidiary companies

will be available for inspection at the Registered Office of

the Company/copy provided on requested by any member.

HUMAN RESOURCE

The employee strength of the Company as on March 31,

2015, stood at 4770 Nos comprising of various categories

of employees in manufacturing plants and other offices in

technical and other professional areas.

The number of employees on the rolls of the Company as

on March 31, 2015 in SC/ST, Ex-servicemen, Physically

Handicapped and Women Employee Categories etc. is

detailed below:

Scheduled Castes 317

Scheduled Tribes 46

Other Backward Classes 105

Ex-Servicemen 5

Persons with Disabilities 15

Women employees 43

Minorities 216

INDUSTRIAL RELATIONS

The overall Industrial Relations situation in the Company

during the year remained cordial.

IMPLEMENTATION OF OFFICIAL LANGUAGE

The efforts towards implementation of Official Language Act,

Rules & Policy as per the directives of the Government in

the Company is continuous. The Official Language

Implementation Committee have been constituted in all the

Units of the Company and the Subsidiaries, including the

Corporate Office at Bangalore to monitor implementation

of Official Language Act, Rules, Policy, etc. which meets

at regular intervals in every quarter.

In order to propagate the usage of Hindi as Official Language,

“HINDI DIWAS/HINDI FORTNIGHT” was observed during

the month of September, 2014. Various competitions in

Hindi such as Hindi Story Writing, Hindi News Paper

Reading, Hindi Quiz Writing, Hindi Conversation, Hindi

Antyakshari, etc., were organized and participants were

awarded prizes. A workshop was organised during the above

period. The Hindi Magazines/Newspapers are being

procured to propagate the usage of Hindi among employees.

The concerned Officials of the Company regularly take part

in the meetings of the Town Official Language

Implementation Committee.

Reporting on progress of Hindi proliferation is being done

periodically on Rajabhasha Vibhag portal.

VIGILANCE ACTIVITIES

The Chief Vigilance Officer appointed by the Government

of India heads the Corporate Vigilance Department of the

Company. Presently the post of Chief Vigilance Officer is

vacant and General Manager (HR) of HMT MTL is holding

the additional charge of CVO as per the directive of Ministry

of Heavy Industry. Chief Vigilance Officer is assisted at

Unit level by exclusively appointed Vigilance Officers.

The Corporate Vigilance Department carries out vigilance

functions in the Holding Company as well as its Subsidiary

Companies. The vigilance functions in the manufacturing

Units and Marketing Offices are looked after by Vigilance

Officers, under the guidance of Chief Vigilance Officer.

All the Unit Vigilance Officers send their monthly Vigilance

/ Inspection Reports and Surprise Inspection reports to CVO.

The reports so received are scrutinized at CVO Office for

further action. Unit Vigilance Officers also verify Annual

Property Returns submitted by the Unit level Officers.

Apart from regular inspections by Unit Vigilance Officers,

CVO conducts CTE type surprise and regular inspections

of high value purchase/contracts and systems by visiting

various Subsidiaries and Units.

Violations of rules and procedures observed during the

inspection of files by CVO/Unit VOs were recorded and

depending upon the seriousness of the deviations, further

actions are taken. Unit Vigilance Officers are advised to

discuss deviations noticed by them during their inspection,

in the quarterly Vigilance Workshop and advice the

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concerned officers that the violations of rules and procedures

pointed out by the Vigilance Department should not be

repeated and should conform to CVC and Company

Purchase Manual guidelines.

Emphasis was laid on preventive vigilance by striving

towards strict adherence to all rules and procedures and

all norms of transparency in tendering process. Based on

CVC’s guidelines for ‘Improving vigilance administration

by leveraging technology and increasing transparency

through effective use of website’ necessary directions

were given by CVO for implementation of the same. Some

of the systems put in place by the Company are:

1. Hosting of all open tenders and high value Limited

Tenders on www.tenders.gov.in (Website of GOI).

2. Publishing details regarding all purchase orders /

contracts concluded in any month and above

the threshold value (presently ` 5.00 lakhs). This

is generally followed by all manufacturing Units.

3. Application form for vendor registration along with

list of items required by different Units of HMT

Limited and Subsidiaries are made available on

Company Website so as to enable the interested

vendors to download the application form and submit

the same to the Unit of their choice.

4. All Managing Directors and Unit Chiefs have been

directed for switching over to e- Procurement

process for all purchases of value ` 2 lakhs and

above and adopt e-payment mode for making all

payments including supplier payments. This is

under implementation.

5. Quarterly vigilance workshops were organized at

all manufacturing units to enhance the level of

vigilance awareness among the employees and

other stakeholders. Vigilance Awareness Week

2014 was observed in all Units and Offices of HMT

Limited and Subsidiary Companies as per the

guidelines of CVC.

The number of inspections including surprise inspections

carried out by CVO and Unit Vigilance Officers along with

the number of property returns scrutinized between April

2014 to March 2015 is tabulated below :-

Inspection Total carried out between April 2014 – March 2015 (by Unit

Vigilance Officers)

Periodic Inspection of Purchase Files 1111

Surprise Inspection 255

Scrutiny of Annual Property Returns 554

Inspections done by CVO (i) HMT Limited Corporate Office, Bangalore (ii) HMT (International) Limited,

(April 2014 to March 2015) Bangalore (iii) HMT MTL Bangalore Complex (MBX), Jalahalli, Bangalore (iv)

HMT MTL Hyderabad (PTH & MTH) (v) HMT MTL Pinjore (vi) HMTL Tractors,

Pinjore.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the

Stock Exchanges, a Report on the Corporate Governance

is annexed as part of this Report along with the Compliance

Certificate from the Auditors. A Report on Management

Discussion and Analysis is also appended to this Report

separately. Further, a declaration by the Chairman &

Managing Director for having obtained affirmation of

compliance of the Code of Conduct by the Board Member

(s) and Senior Management for the year ended March 31,

2015, is also appended.

The Audit Committee could not be reconstituted as per Cl.

49 of the Listing Agreement in the absence of Independent

Directors to be appointed by the Government on the Board.

The Register of Members and Share Transfer Records both

in respect of the shares held in physical and depository

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form are maintained by Karvy Computershare Private

Limited, the Registrars & Share Transfer Agents of the

Company.

INFORMATION REGARDING CONSERVATION OF

ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN

EXCHANGE EARNINGS AND OUTGO

Information on conservation of energy, technology

absorption and foreign exchange earnings and outgo. (as

required under the section 134(3)(m) of companies Act. 2013

read with rules 8 of the companies (Accounts) Rules, 2014)

are annexed to this Report.

DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to

the information and explanations obtained by them, your

Directors make the following statements in terms of Section

134(3)(c) of the Companies Act, 2013:

ü that in the preparation of the annual financial

statements for the year ended 31.03.2015, the

applicable accounting standards has been followed

along with proper explanation relating to material

departures;

ü that such accounting policies have been selected

and applied consistently and judgments and

estimates have been made that are reasonable and

prudent so as to give a true and fair view of the

state of affairs of the Company at the end of the

financial year and of the profit and loss of the

Company for the year ended on that date;

ü that proper and sufficient care has been taken for

the maintenance of adequate accounting records

in accordance with the provisions of the Companies

Act, 2013 for safeguarding the assets of the

Company and for preventing and detecting fraud

and other irregularities;

ü that the annual financial statements have been

prepared on a going concern basis;

ü that proper internal financial controls were in place

and are adequate and were operating effectively;

ü that proper systems to ensure compliance with the

provisions of all applicable laws were in place and

were adequate and operating effectively;

ü Since the overall performance of the Company is

evaluated against the annual MoU targets set by

the Department of Public Enterprises (DPE), no

specific criteria is laid down for the evaluation of

Board and of its Committees and the individual

Directors. Since your Company being a Central

Public Sector Enterprise (CPSE), the personnel

policies and guidelines issued by DPE are being

adopted in line with other CPSEs. Accordingly, your

Company has not formulated any separate policy

in respect of appointment or evaluation of senior

management and key managerial personnel.

Extract of Annual Return

In terms of Section 92(3) of the Companies Act, 2013 read

with Rule 12 of the Companies (Management and

Administration) Rules, 2014, an extract of the Annual Return

in the prescribed form is placed as Annexure -

AUDITORS

M/s Dokaniya S.Kumar & Co., Howrah , were appointed as

Statutory Auditors of the Company for the year 2014-15 by

the Comptroller & Auditor General of India. Three firms of

Chartered Accountants were also appointed as Branch

Auditors for the other Units/Divisions of the Company.

Replies to the observations by the Statutory Auditors in

their Report are given by way of an addendum to this

Report.

Secretarial Audit Report

In terms of Section 204 of the Companies Act 2013 and

Rules made thereunder, Mr. D. Venkateswaralu, Practicing

Company Secretary has been appointed as Secretarial

Auditor of the Company. The report of the Secretarial Auditor

is enclosed as Annexure to this report. along with

management’s response there to.

DIRECTORS

Vide Presidential Order No.5(8)/2010-P.E.X dated February

3, 2015 issued by the Department of Heavy Industry,

Ministry of Heavy Industries and Public Enterprises, Shri

Vishvajit Sahay has been appointed as the Part-time Official

Director of the Company with immediate effect, until further

orders vice Shri. Rajesh Kumar Singh.

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Shri Vishvajit Sahay is proposed for appointment as Director

in terms of Article 67(4) of the Article of Association of the

Company read with Section 160 of the Companies Act,

2013 in the ensuing Annual General Meeting for which a

notice has been received from the Member.

The Board placed on record its appreciation for the valuable

services rendered by Shri R.K.Singh whose term of Office

ended during the year.

Shri P.Sivarami Reddy, Director (Operations) retires by

rotation at the ensuing Annual General Meeting and being

eligible, offeres himself for re-appointment.

ACKNOWLEDGEMENTS

Your Directors are thankful to the various Departments and

Ministries in the Government of India, particularly the

Department of Heavy Industry, Ministry of Corporate Affairs,

Comptroller and Auditor General of India, Principal Director-

Commercial Audit, Statutory and Branch Auditors, various

State Governments, Foreign Collaborators, the Subsidiary

Companies, Suppliers, Reserve Bank of India, the

Consortium of Banks lead by UCO Bank and the valued

Customers of the Company both in India and abroad for

their continued co-operation and patronage.

Your Directors would also like to take this opportunity to

express their appreciation for the contributions made by

the Company’s employees and look forward to their

continued services in pursuit of building a world class Indian

Company.

For and on behalf of the Board of Directors

( S. Girish Kumar)

Chairman & Managing Director

Place: Bangalore

Date: 10-08-2015

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General Economic Environment:

The Indian economy registered a growth rate of 4.4 per

cent in the first quarter (Q1) of 2014-15 where as negative

growth of 13.64 percentage is registered during the first

quarter of current year 2015-16.

Tractor Industry witnessed continuous growth in the years

2009-10, 2010-11 and 2011-12. During the year 2012-13 it

witnessed negative growth of about 3% due to slow down

in Indian economy. During 2013-14 Tractor Industry again

took a big leap and registered 20% growth in domestic

sales.

During 2014-15 tractor industry has once again shown a

negative growth of 12%. Untimely Monsoon, damage to

rabi crops, decline in crop output, lower yields and

weakening crop prices during the current year have

negatively impacted farm sentiments.

M&M maintained their market leadership with 40% market

share followed by TAFE (24%), Escorts (10.5%) and

Sonalika (12%). Further, non-agricultural demand pull has

also remained subdued with slow pick-up in pace of

infrastructure activity.

Exports, however registered a growth of over 20% on back

of growing demand from U.S, near-by markets- especially

Sri Lanka, Bangladesh and parts of Africa. Major market

share is captured by large manufacturers. HMT’s market

share has reduced significantly.

The tractor density of India is about 16 tractors for 1,000

hectares, while the world average is 19 tractors and that of

USA is 27. Clearly, there is significant opportunity for

mechanization of agriculture.

Government of India (GOI) remains committed towards rural

development and agri-mechanisation; besides other factors

like scarcity of farm labour, credit availability, moderate

penetration and shortening replacement cycle continue to

encourage demand for tractors

Opportunities:

• Good demand for Tractors in Indian market and

abroad.

• Demand for higher HP Tractors due to infrastructure

projects.

• Govt. support for rural development and farm

mechanization.

• Demand for I.P engines for Gen. Set, mobile

communication towers and power generation.

• Demand of PTO driven implements like Rotavator

increasing.

FINANCIAL PERFORMANCE

The turnover of the Company for the year 2014-15 was

Rs. 60.28 crore with a net Loss of Rs. 96.57 crore.

The total borrowing by the Company as on 31-3-2015 was

Rs. 116.45 crore or which includes Rs. 72.02 crore Govt. of

India Loan

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has in place adequate systems of Internal

Control commensurate with its size and nature of its

operations. The salient features of internal control systems

are:

• Clear delegation of power with authority limits

for incurring capital and revenue expenditure.

• Well laid down corporate policies for accounting,

reporting and Corporate Governance.

• Safeguarding assets against unauthorized use or

losses or disposition, and ensuring that the

transactions are authorized , recorded and reported

correctly.

• Process for formulating and reviewing annual and

long term business plans have been laid down.

• Detailed Annual budget giving further break up of

monthly targets under various heads.

MANAGEMENT DISCUSSIONS AND ANALYSIS

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• Continuous review of the performance by the Core

Committee with reference to the budgets on an

ongoing basis.

• Compliance with laws and regulations.

The Internal Audit Department of the Company alongwith

the external firms appointed for carrying out internal audits

of Units / Divisions reviews, evaluates and appraises the

various systems, procedures / policies laid down by the

Company and suggests meaningful and useful

improvements.

Internal Audit Department coordinates with the Units /

Divisions of the company for ensuring coverage of all areas

of operations in order to bring a transparency in the whole

spectrum of the Company.

The Audit Committee reviews the Audit Report submitted

by the Internal Auditors. Suggestions for improvement are

considered and the Audit Committee follows up on the

implementation of corrective actions. At present the Audit

Committee has to be reconstituted after appointment of

Independent Directors on the Board by the Government.

The Committee also meets the Company’s statutory Auditors

to ascertain, inter-alia, their views on the adequacy of

internal control system in the Company and keeps the Board

of Directors informed of its major observations from time to

time. Meeting of the Audit Committee could not be held

during the year due to non-reconstitution.

HUMAN RESOURCES

As on 31.03.2015, the Company and its Subsidiaries had

a total workforce of 4770 employees, comprising various

categories of employees in manufacturing plants and other

offices in technical and other professional areas.

The Company has taken suitable measures to bring down

the Personnel Costs by implementing several austerity

measures.

Statistics on the number of employees separated on availing

the VR Scheme in HMT and its Subsidiary Companies during

the last four years is furnished below:

Sl. Organisation No. of employees

No. opted VRS

2011-12 2012-13 2013-14 2014-15 Total

1. HMT Limited - - - - -

2. HMT Machine Tools Ltd. - - - - -

3. HMT Watches Ltd. 124 51 - - 175

4. HMT Chinar Watches Ltd. - 57 18 - 75

5. HMT Bearings Ltd. - - - - -

6. HMT (International) Ltd. - - - - -

Total 124 108 18 - 250

Surplus manpower in certain areas has been deployed

under re-deployment scheme by providing training and re-

training to the employees and posting them at thrust areas

to meet the goals of the organization. The Company is

trying its best to retain the skilled and professionally qualified

personnel to arrest attrition.

PERSONNEL AND INDUSTRIAL RELATIONS

The Personnel and Industrial Relations situation in the

Company during the year remained cordial. 1997 revision

in Pay/Wages have been implemented affected in HMT

Limited and and HMT Machine Tools Limited and 2007

Pay/Wage revision was implemented in HMT (International)

Ltd., with due approval from the Government of India.

CORPORATE GOVERNANCE

In compliance with Clause 49 of the Listing Agreement with

the Stock Exchanges and as per the applicable provisions

of the Companies Act, 2013 as amended from time to time,

your Directors submit their report on the matters mentioned

in the said Clause and practice followed by the Company.

SUBSIDIARY WISE QUALIFICATION DETAILS AS ON 31.3.2015

Unity / IP Engg. Diploma Professionals ITI/ General Others

Subsidiary as on Gradu Holders HR Finance NAC Graduates

31-03-15 ates

HMT 1421 50 129 6 5 845 126 260

Limited

HMT MTL 2218 235 423 15 10 902 144 489

HMT WL 1005 22 97 2 0 69 81 734

HMT CWL 32 - 1 - - 9 1 21

HMT BLH 55 4 12 1 0 20 6 12

HMT(I) L 39 14 3 1 1 - 18 2

TOTAL 4770 325 665 25 16 1845 376 1518

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Attendance particularsNumber of other Directorships and

Name Category

Committee Member/ Chairmanships held

Board AGM / Directorship Committee

Meetings EGMMembership Chairmanship

S.G.Sridhar C & MD - Under Suspension with - -

effect from 15.06.2013

S.Girish Kumar C & MD 9 Yes 7 - -

Antony chacko DOP 1 - 2

P.Sivarami Reddy DOP/DFN (I/c) 5 3

R.K.Singh NENI 8 - 1

S.K.Bahri NENI 8 - 2 2 1

Vishvajit Sahay NENI 1 - 4 - -

C: Chairman & Managing Director, NENI: Non Executive & Non Independent, NEI: Non Executive & Independent.

The Company has been following good Corporate

Governance practices like striking reasonable balance in

the composition of the Board of Directors, setting up of

Audit Committee and other Committees, adequate

disclosure of information and business to be deliberated

by the Board, etc.

I. BOARD OF DIRECTORS

As on March 31, 2015 the Board of Directors comprised of

Chairman & Managing Director I/c, Two part-time Official

Directors and Director I/c (Operations/Finance). Currently

the position of 4 part-time Non Official (Independent)

Directors are vacant.

The day-to-day management of the Company is conducted

by the Chairman & Managing Director and under the

supervision and control of the Board of Directors.

During the year 2014-15, Nine (9) Board Meetings were

held on May 7, June 13, June 20, July 23, August 11,

September 4, October 10,November 11 in the calendar year

2014 and February 12 in the calendar year 2015.

The composition of Directors and their attendance at the

Board Meetings and at other Meetings during the year are:

Brief Resume of Directors proposed for appointment

and re-appointment as per Listing Agreement 49

VIII(E)(1)(a)

Shri Vishvajit Sahay

Shri Vishvajit Sahay aged 48 years is a IDAS 1990 batch.

He has worked in various capacities as Director (Films),

Ministry of Information and Broadcasting, Finance Manager

in Acquisition Wing, Ministry of Defence, Sr. Dy. Controller

General of Defence Accounts (Admn), Joint Controller

General of Defence Accounts and at present he holds a

post of Joint Secretary, Department of Heavy Industry.

Shri Vishavajit Sahay does not hold any shares in HMT Ltd.

SHRI P.SIVARAMI REDDY

Shri P.Sivarami Reddy aged 57 years was inducted as

Director (Operations & Finance) on the Board of HMT with

effect from 26.05.2014. A Mechanical Engineer graduate

with Master in Business Administration in Marketing

Management has served in various capacities for nearly 3

decades in different Units of HMT Group. Before joining

HMT he worked in two private companies in Hyderabad

from 1980 to 1983.

Shri P.Sivarami Reddy does not hold any shares in HMT

Ltd.

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II COMMITTEES OF THE BOARD

A. AUDIT COMMITTEE

In view of the cessation of the Independent Directors and

non induction of new incumbents to these positions, the

Audit Committee could not be duly reconstituted as per

the requirement of the Listing Agreement (Clause 49). As

President of India is the appointing authority for Directors,

Government has been requested to appoint Independent

Directors and Woman Director to comply with Listing

requirements and provisions of Company’s Act, 2013.

Further action for reconstitution of manadatory committees

will be taken after appointment of Independent Directors on

the Board by the Government.

B. REMUNERATION TO DIRECTORS

The details of remuneration of whole time Directors

are given below:

Name of Director Salary Other Total

(` ) Benefits (` ) (` )

Antony Chacko 231296 71354 302650

No sitting fee is payable to any of the directors except

Part-time Non-Official (Independent) Directors. An amount

of Rs.5000/- per meeting for the Board and ` 3000/- for

each Committee Meeting is paid as sitting fee to the Part

time Non-Official (Independent) Director for attending the

Board and Committee Meetings.

• The salary of the whole time Directors does not include

performance-linked incentive except amount payable

as per the productivity linked incentive scheme of the

Company.

C. SHARE TRANSFER SUB -COMMITTEE

The Share Transfer Committee comprises of the Chairman

and Managing Director as a single member to look after

transfer/transmission of shares issued by the Company &

Issue of duplicate certificates, other than confirmation of

dematerialization of shares. Four meetings were held during

the year 2014-15.

Name of the Compliance Officer:

Shri Subash B.K,

Company Secretary

D. SHAREHOLDERS/INVESTORS GRIEVANCE

During the year ended March 31, 2015 there were 28

complaints received from Shareholders which has been

resolved during the year itself.

Number of pending Share Transfers - NIL

III GENERAL BODY MEETINGS

The last three Annual General Meetings were held as under:

Financial Date Time Venue

year

2011-2012 28.09.2012 10.30 a.m

2012-2013 13.12.2013 10.30 a.m

2013-2014 30.09.2014 10.30 a.m

IV DISCLOSURES

i) There were no transactions of material nature with its

Promoters, the Directors or the Management,

their Subsidiaries or Relatives etc., which may have

potential conflict with the interest of the Company at

large.

ii) There were no instances of penalties, strictures

imposed on the Company by the Stock Exchange or

SEBI or any statutory authority on any matter related

to capital markets during the last three years.

iii) The Company is in process of implementing Whistle

Blower Policy mechanism and the same shall be

posted in Website.

V Reconciliation of Share Capital Audit

A qualified practicing Company implementing carried out

a share capital audit to reconcile the total admitted equity

share capital with the National Securities Depository Limited

(NSDL) and Central Depository Services (India) Limited

(CDSL) and the total issued and listed equity share capital.

Registered Office

at No. 59,

Bellary Road,

Bangalore-560 032.

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The audit report confirms that the total issued/paid-up capital

is in agreement with the total number of shares in physical

form and total number of dematerialized shares held with

NSDL and CDSL.

VI SUBSIDIARY COMPANIES

The Minutes of the Board meetings along with a report on

significant developments of the unlisted Subsidiary

Companies are periodically placed before the Board of

Directors of the Company.

VII MEANS OF COMMUNICATION

The Company has published its Quarterly Results as per

the listing requirements in leading newspapers. both in

English & vernaculor language The above results are also

displayed at the Company’s website www.hmtindia.com.

Pursuant to the directions of Securities & Exchange Board

of India (SEBI), the Company has been submitting

documents viz., Shareholding Pattern, Financial Results,

Annual Report etc.

VIII CEO AND CFO CERTIFICATION

In terms of Clause 49 of the Listing Agreement with the

Stock Exchanges, the Certification by the CEO (Chairman

& Managing Director) on the Financial Statements and

Internal controls relating to financial reporting for the financial

year 2014-15 has been obtained and was placed before the

Board.

IX GENERAL SHAREHOLDERS INFORMATION

i) Annual General Meeting September 30, 2015

10.30 A.M at

“HMT Bhavan”

No.59, Bellary Road

Bangalore - 560 032

ii) Financial year April 01, 2014 to

March 31, 2015

iii) Book Closure September22, 2015 to

September 30, 2015

(both days inclusive)

iv) Listing of Shares and 1. Bombay Stock

other Securities Exchange Limited,

Mumbai

2. National Stock

Exchanges of

India Ltd., Mumbai

(Annual Listing Fees for the year have been paid to

the above Stock Exchanges)

v) Stock Code No. 500191

Bombay Stock

Exchange Ltd., Mumbai

National Stock Exchange HMT

of India Limited, Mumbai

ISIN No. INE 262A01018 IN

Registrars & Share M/s. Karvy

Transfer Agents Computershare

Private Limited.

46, Avenue 4, Street

No.1, Banjara Hills,

Hyderabad - 500 034.

vi) Share Transfer System

The Share Transfer Committee of the Board meets at

regular intervals, so that shares lodged for transfer are

registered and dispatched back well within time limit

prescribed in this respect under the listing agreements.

vii) Non-Mandatory Requirements

Being a Government Company, the appointment and

fixation of terms and conditions of appointment of all

Directors are made by the Government of India. The

Company declares that no personnel have been denied

the access to Audit Committee.

As the Company’s financial results are displayed on

the Website of the Company and published in the

Newspapers, they are not separately circulated to all

the shareholders. The Company is making endeavors

to move towards a regime of unqualified financial

statements.

viii) The details of high/low market price of the shares at

the Bombay Stock Exchange Ltd., Mumbai and at

National Stock Exchange of India Ltd., Mumbai are

as under:

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ix) Distribution of Shareholding:

The shareholding distribution of Equity shares as of 31.03.2015 is given below:

Category No. of Cases % of Cases Amount % of Amount

1-5000 19733 88.50 26276590.00 0.35

5001- 10000 1395 6.26 11681660.00 0.15

10001- 20000 604 2.71 9381310.00 0.12

20001- 30000 222 1.00 5741920.00 0.08

30001- 40000 88 0.39 3212420.00 0.04

40001- 50000 74 0.33 3549140.00 0.05

50001- 100000 97 0.44 7152830.00 0.09

100001& Above 85 0.38 7536505530.00 99.12

Total: 22298 100.00 7603501400.00 100.00

Month Quotation at Bombay Stock Quotation at National Stock

Exchange Ltd., Mumbai Exchange of India Ltd., Mumbai

HIGH LOW HIGH LOW

Apr-14 32.4 28.55 32.4 28.65

May-14 52.55 28.5 52.55 28.6

Jun-14 52.3 42.1 52 42

Jul-14 59.15 42.5 59.15 42.85

Aug-14 46.4 40.6 46.8 40.6

Sep-14 43.7 30.3 43.75 30.2

Oct-14 41.3 27.1 41.25 28.35

Nov-14 41.65 33.9 41.6 34.75

Dec-14 62.7 37.1 62.7 34

Jan-15 77.75 46 77.8 47.2

Feb-15 67.75 54 67.7 54.15

Mar-15 61.25 39.2 61.15 39.15

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x) Shareholding Pattern: as on 31/03/2015 (Total )

Shareholders No. of Shares Total Shares % Equity

BANKS 1 550 0.00

CLEARING MEMBERS 106 153168 0.02

FOREIGN INSTITUTIONAL INVESTORS 1 5265 0.00

H U F 454 377476 0.05

INDIAN FINANCIAL INSTITUTIONS 3 40673 0.01

INDIAN MUTUAL FUNDS 11 19000 0.00

BODIES CORPORATES 563 69188512 9.10

NON RESIDENT INDIANS 142 97222 0.01

PROMOTERS 1 684315126 90.00

RESIDENT INDIVIDUALS 21015 6153138 0.81

TRUSTS 1 10 0.00

Total: 22298 760350140 100.00

xi) Dematerialisation of Shares:

The Company’s Shares are compulsorily traded in the

electronic mode from June 26, 2000. As on 31st March

2015, 99.98 % of the Company’s Shares representing

76,02,18,178 equity shares were held in demater-

ialised form and the balance 0.02 % representing

1,31,962 shares were in the physical form.

xii) Plant Locations

The Company’s plants are located at Pinjore in

Haryana, Hyderabad in Telangana and Aurangabad in

Maharashtra, the addresses of which are given below:

Pinjore - 134101

Dist. Panchkula, Haryana

Narsapur Road,

HMT Township P.O., Telangana - 500 854

H-2, MIDC, Chikalthana I.A,

Post Box No. 720, Aurangabad - 431 210

xiii) Address for correspondence:

Registered Office is situated at:

HMT Bhavan, No.59, Bellary Road,

Bangalore - 560 032,

Karnataka, India.

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ANNEXURE TO THE DIRECTORS’ REPORT

1. Conservation of Energy:

Energy Conservation Measures implemented are asfollows :

• Portable Compressors are being run when less air isrequired

• Compressed air leakages plugged, resulting inswitching off one compressor of 120 HP motor.

• Tube light fittings, Fans and compressors are beingswitched off during lunch break and whenever notrequired.

• Air compressor in foundry run only after accumulationof moulding load.

• Work pre-planned for optimum utilization of heattreatment furnaces and paint plant.

• Loading of machines pre-planned.

2. Technology absorption:

Technology enhancement /absorption in Tractordivision is as under :

• Engine up-gradation (phase –I) with technicalassistance from ARAI, Pune: Acceptance test of allfour engines of 27, 37, 40 and 45 HP completed.Type Approval Test has been taken up.

• Development of 25KVA silent DG Set Engine as pernew CPCB Emission norms is under progress atARAI, Pune.

• Design released for Introduction of Dust Boot in gearshifting arrangement to avoid entry of dust and waterin Gear Box.

• Release of modified design for 540 PTO RPM at 1600Engine RPM in 25 to 50 HP tractors for RotavatorApplication.

• Design modification for easy PTO shifting for 25-50HP and 65 HP tractors released.

Design released for side gear shifting for PTO & high/ lowlevers for 25 – 50 FX & DX tractors.

3. Segment wise / Product wise performance:

HP Segment 2014-15 2013-14 2012-13

21-30 91 125 239

31-40 807 921 1310

41-50 122 241 265

Above 50 107 201 191

4. Performance Highlights for the year 2014-15

Operations:

• Introduction and continuous procurement of CEAT

make tyres for all sizes and models, stopping

complete procurement from Birla make from May’

2014 onwards, thus meeting the most urgent need

of Marketing.

• Development and procurement of common MITA lifts

for FX and DX models (2522 to 5022). Pilot supplies

were given in January’ 2015

• Proto supplies of MITA lifts for 6522 model were also

developed and procured in February’ 2015.Regular

procurement will take place after getting satisfactory

performance report from R&D / Assembly.

• Machining of 3-Bore Crankcase for M/s ACE Ltd.,

Palwal (Haryana) taken up in the Crankcase

Manufacturing Line of TRP during the year from

December’ 2014. Till 31st March’ 2015, total 406 nos

crankcases delivered successfully and generated a

revenue of Rs.27.54 Lakhs.

• Alternate sources for critical single source items viz.

Hydraulic pump assembly, Power steering pump

assembly and Ball screw assembly etc. were

successfully developed and regular supplies are being

received.

• As per marketing requirements, SINGLE PIECE

BONNET OF 6522 model was developed and

introduced and nearly 30 sets have already been

received since mid Feb,15.

Research & Development:

Consistent development of Products for the market

expectations can bring about innovations and product

offerings which will further enhance the customer

reach. Investments made in R&D will benefit in

increasing the Turnover.

R&D Expenditure during 2014-15 stands at Rs. 285

lakhs.

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Description 2014-15 2013-14

Capital Nil Nil

Recurring 285 231

Total 285 231

Total R&D Expenditure as % of Turnover 4.73%

5. PLAN FOR 2015-16:

• Development of phase – II (55, 65 and 75 HP) Engines.

• Completion of development of HMT 25 KVA DG set

Engine as per present CPCB Emission norms and

launching of the same.

• Design and development of side gear shifting

arrangement with synchromesh gear drive for 50,65

and 75 HP Tractor models.

• Adoption of MITA Hyd.lift assembly on 6522 Tractor

model and another common MITA Hyd.lift assembly

on FX /DX Tractor model.

• Boosting sales through Distributors – 5 nos. new

distributors will be appointed.

• Dealers’ network would be further extended by

appointing 30 nos. new dealers.

• Financial tie up with commercial banks for retail

finance of Tractors.

• Participation in 20 nos. Agri. Fairs, Organizing 29

nos. sales campaigns and 65 no. free service camps

and 41 other activities like local mechanic meet,

farmers’ training camp – Total 155 such activities

planned during 2015-16.

• Marketing Team to be strengthened by appointing

local young contractual manpower.

• Engagement of skilled manpower in some areas on

contract basis for maximum utilization of Plant /

Production Capacity.

• Emphasis on Preventive Maintenance and Spares

Management for Plant & Machinery to minimize

breakdowns and Production Loss.

• Focus on Critical Tools, Jigs & Fixtures for smooth

flow of In-House Manufactured components.

• Partial out sourcing of Heat Treatment operations due

to limitation of SQF.

• Training of 300 employees in various areas like

Productivity Improvement, Total Quality Management,

Safety, Employee Development, Vigilance awareness

etc

• Awarding contract for ISO 14001-2004 Certification.

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ADDENDUM TO DIRECTORS’ REPORT FOR THE YEAR 2014-15 IN RESPECT OFOBSERVATIONS MADE BY STATUTORY AUDITORS ON THE ACCOUNTS OF HMT LIMITEDFOR THE YEAR ENDED 31ST MARCH 2015.

Ref. STATUTORY AUDITORS’ OBSERVATIONS COMPANY’S REPLY

HMT LIMITED:

CHO:

1. No actuarial valuation has been obtained in respect of HMT Limited (Holding Company) has five Subsidiarycontributions required for Provident Fund liability by the Companies, viz., (1) HMT Machine Tools Limited,Company as per the requirements of AS – 15 “Employee (2) HMT Watches Limited, (3) HMT (International)Benefits”. The amount of contribution to Provident Fund Limited, (4) HMT Bearings Limited and (5) HMTis Rs.26.30 Lakhs during the year under audit. Chinar Watches Limited. The PF Trusts of various

Units of the Subsidiary Companies are located indifferent locations, viz., Bangalore, Pinjore,Hyderabad, Kalamassery, Ajmer, & Srinagar.Further, combination of two or more SubsidiaryCompanies’ PF accounts are being maintained bysingle PF Trust.

1. Tractor Division, Pinjore:

No actuarial valuation has been obtained with respect to Further, the HMT Watch Factory Ranibagh PFthe provisions made for Provident Fund and Outstanding Trust had been taken over by Regional PFamount has been shown amounting to Rs.2,174.38 Lakhs. Commissioner’s Office w.e.f. 01.09.2010.

For implementing Accounting Standard bifurcationof income & expenditure, assets & liabilities of PFTrust is required and since in the PF Trust Account,income & expenditure statement and balancesheets are common for the employees of differentCompanies / Units managed by it, as such , it isvery difficult to bifurcate the same. However allout efforts are being made to compile the requiredinformation for the purpose of actuarial valuation.

2. The amount of Gratuity Provision (Unfunded) to be The Company has separate Gratuity Trust. Therecognized in Balance Sheet as per actuarial valuation Gratuity Trust has taken a Group Gratuity Policyreport is Rs.6,842.12 Lakhs. Whereas as per Note No. 5 with LIC to cover amounts up to Rs.50,000/-& Note No. 9 the aggregate provision amounts to per eligible employee in respect of HMT Limited,Rs.6,857.34 Lakhs. HMT Machine Tools Ltd, HMT Watches Ltd and

Chinar Waches Ltd. As per the Actuarial Valuation,the funds available with LIC is sufficient to meetthe liability as on 31.03.2015.

However, the Un-funded part to cover over & aboveRs.50,000/- is accounted in the respectiveCompany accounts as a percentage to Salaries /Wages, based on Actuarial valuation done by LIC.Accordingly the provision of Rs.6857.34 lakhs isshown as per Note No.5 & 9.

Whereas the Un-funded Gratuity provision as peractuarial valuation by LIC is Rs.6842.12 with aminor difference of Rs.15.22 Lakhs which is only 0.22%.

for and on behalf of the Board of Directors

(S.Girish Kumar)

Chairman & Managing Director

Place : Bangalore

Dated : 10-08-2015

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Form No. MGT-9

EXTRACT OF ANNUAL RETURN

as on the financial year ended 31.03.2015

[Pursuant to Section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies

(Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

i) CIN : L29230KA1953PTC0748

ii) Registration Date : 7th February, 1953

iii) Name of the Company : HMT LIMITED

iv) Category/Sub-Category of the Company : Company Limited by Shares /

Union Government Company

v) Address of the Registered office : HMT Bhavan, 59, Bellary Road.

and contact details Bangalore – 560 032

Ph.: 91-80-23330333

Fax: 91-80- 23339111

vi) Whether listed company Yes/No : Yes, on NSE& BSE

vii) Name, Address and Contact details : Karvy Computershare Private Ltd

of Registrar and Transfer Agent 46, Avenue 4, Street, Banjara Hills,

Hyderabad - 500 034.

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10% or more of the total turnover of the company shall be stated:-

Sl. Name and Description of NIC Code of the % to total turnoverNo. main products / services Product/ service of the company

1. Tractors 351105000 90%

2. Food Processing Machinery 353904000 10%

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Sl. Name and address CIN/GLN Holding/ % of

No. of the Company subsidiary/ shares

Joint Venture held

associate

1 HMT Machine Tools Limited U02922KA1999GOI025572 Subsidary 100

2 HMT Watches Limited U33301KA1999PLC025573 Subsidary 100

3 HMT Chinar Watches Limited U29190JK2000PLC002088 Subsidary 100

4 HMT Bearings Limited U29130TG1964FLC001023 Subsidary 99.37

5 HMT (International) Limited U33309KA1974PLC002707 Subsidary 100

6 SUDMO-HMT U05190KA1998PLC024253 Joint Venture 50

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

i) Category-wise Share Holding

Cate % of % of % Change

-gory Category of Shareholders Demat Physcial Total Total Demat Physcial Total Total During the

Code Shares Shares year

(I) (II) (III) (IV) (V) (VI) (VII) (VIII) (IX) (X) (XI)

(A) PROMOTER AND PROMOTER

GROUP

(1) INDIAN

(a) Individual /HUF 684315126 0 684315126 90.00 684315126 0 684315126 90.00 0.00

(b) Central Government/State 0 0 0 0.00 0 0 0 0.00 0.00

Government(s)

(c) Bodies Corporate 0 0 0 0.00 0 0 0 0.00 0.00

(d) Financial Institutions / Banks 0 0 0 0.00 0 0 0 0.00 0.00

(e) Others 0 0 0 0.00 0 0 0 0.00 0.00

Sub-Total A(1) : 684315126 0 684315126 90.00 684315126 0 684315126 90.00 0.00

(2) FOREIGN

(a) Individuals (NRIs/Foreign Individuals) 0 0 0 0.00 0 0 0 0.00 0.00

(b) Bodies Corporate 0 0 0 0.00 0 0 0 0.00 0.00

(c) Institutions 0 0 0 0.00 0 0 0 0.00 0.00

(d) Qualified Foreign Investor 0 0 0 0.00 0 0 0 0.00 0.00

(e) Others 0 0 0 0.00 0 0 0 0.00 0.00

Sub-Total A(2) : 0 0 0 0.00 0 0 0 0.00 0.00

Total A=A(1)+A(2) 684315126 0 684315126 90.00 684315126 0 684315126 90.00 0.00

NO. OF SHARES HELD AT THEBEGINNING

NO. OF SHARES HELD AT THE ENDOF THE YEAR 31/03/2015

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NO. OF SHARES HELD AT THEBEGINNING

NO. OF SHARES HELD AT THE ENDOF THE YEAR 31/03/2015

Cate & of % of % Change

-gory Category of Shareholders Demat Physcial Total Total Demat Physcial Total Total During the

Code Shares Shares year

(I) (II) (III) (IV) (V) (VI) (VII) (VIII) (IX) (X) (XI)

(B) PUBLIC SHAREHOLDING

(1) INSTITUTIONS

(a) Mutual Funds /UTI 100 18900 19000 0.00 100 18900 19000 0.00 0.00

(b) Financial Institutions /Banks 41555 41555 0.01 4412 4412 0.00 0.00

(c) Central Government / State

Government(s) 0 0 0 0.00 0 0 0 0.00 0.00

(d) Venture Capital Funds 0 0 0 0.00 0 0 0 0.00 0.00

(e) Insurance Companies 243700 100 243800 0.03 36711 100 36811 0.00 0.03

(f) Foreign Institutional Investors 5265 0 5265 0.00 5265 0 5265 0.00 0.00

(g) Foreign Venture Capital Investors 0 0 0 0.00 0 0 0 0.00 0.00

(h) Qualified Foreign Investor 0 0 0 0.00 0 0 0 0.00 0.00

(i) Others 0 0 0 0.00 0 0 0 0.00 0.00

Sub-Total B(1) : 290620 19000 309620 0.04 46488 19000 65488 0.01 0.03

(2) NON-INSTITUTIONS

(a) Bodies Corporate 69054859 800 69055659 9.08 69187712 800 69188512 9.10 -0.02

(b) Individuals

(i) Individuals holding nominal share

capital upto Rs.1 lakh 5902053 112739 6014792 0.79 5707585 112162 5819747 0.77 0.03

(ii) Individuals holding nominal share 469180 0 469180 0.06 710867 0 710867 0.09 -0.03

capital in excess of Rs.1 lakh

(c) Others

CLEARING MEMBERS 120952 0 120952 0.02 153168 0 153168 0.02 0.00

NON RESIDENT INDIANS 64801 0 64801 0.01 97222 0 97222 0.01 0.00

TRUSTS 10 0 10 0.00 10 0 10 0.00 0.00

(d) Qualified Foreign Investor 0 0 0 0.00 0 0 0 0.00 0.00

Sub-Total B(2) : 75611855 113539 75725394 9.96 75856564 112962 75969526 9.99 -0.03

Total B=B(1)+B(2) : 75902475 132539 76035014 10.00 75903052 131962 76035014 10.00 0.00

Total (A+B) : 760217601 132539 760350140 100.00 760218178 131962 760350140 100.00 0.00

(C) Shares held by custodians, against which

Depository Receipts have been issued

(1) Promoter and Promoter Group

(2) Public 0 0 0 0.00 0 0 0 0.00 0.00

GRAND TOTAL (A+B+C) : 760217601 132539 760350140 100.00 760218178 131962 760350140 100.00

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(ii) Shareholding of Promoters

(iii) Change in Promoters’ Shareholding (please specify, if there is no change)

(IV) Shareholding pattern of top ten Shareholders (other than Directors, Promoters

and Holders of GDRs and ADRs):

No. of % of total %of Shares No. of %of Shares %of Shares % changeShare Shares of Pledged / Share Shares of Pledged / in share

the company encumbered the company encumbered holdingto total shares to total shares during

the year

1 President of India 684315126 90% NIL 684315126 90 NIL NA

Sl. Shareholder�sShareholding at the beginning of the year Share holding at the end of the yearNo. Name

No. of shares% of total shares of

No. of shares% of total shares of the

the company Company

At the beginning of the year 684315126 90% 684315126 90%

Date wise Increase / Decrease in

Promoters Share holding during the

year specifying the reasons for - - - -

increase / decrease (e.g. allotment

/ transfer / bonus/ sweat equity etc):

At the End of the year 684315126 90% 684315126 90%

Shareholding at the beginning Cumulative Shareholdingof the year during the year

Sl. No. NAME/JOINT NAME(S) HOLDING % TO EQT

1 SPECIAL NATIONAL INVESTMENT FUND 67538614 8.88

2 UDAYANKUMAR N KOTHARI / NEETA U KOTHARI 100168 0.01

3 KARVY STOCK BROKING LTD 68283 0.01

4 PACE STOCK BROKING SERVICES PVT LTD 54411 0.01

5 FORTUNE CREDIT CAPITAL LTD 50000 0.01

6 RAJU R. BAXI 45439 0.01

7 UDAYANKUMAR N KOTHARI 44815 0.01

8 SRL IMPEX PVT LTD 40000 0.01

9 THE NEW INDIA ASSURANCE COMPANY LIMITED 36711 0.00

10. BONAZAPORTFOLIO LTD 29746 0.00

TOTAL: 68008187 8.95

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(v) Shareholding of Directors and Key Managerial Personnel:

V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding / accrued but not due for payment

Shareholding at the beginning of the year Cumulative Shareholding during the year

For each of the Directors and KMP No. of Shares % of total shares No. of shares % of total sharesof the company of the company

Non of the Directors or Key Managerial Personnel is holding any shares in the company

At the beginning of the year -NIL- -NA- -NIL- -NA-

Date wise Increase / Decrease in

Promoters Share holding during

the year specifying the reasons -NA- No change

for increase/ decrease (e.g.

allotment / transfer / bonus/

sweat equity etc):

At the End of the year -NIL- -NA- -NIL- -NA-

For each of the Directors and KMP Secured Loans Unsecured Deposits Total

excluding deposits Loans Indebtedness

Indebtedness at the beginning of the

financial year as on 01.04.2014

i) Principal Amount 3154.93 6672.50 9827.43

ii) Interest due but not paid - 1418.10 - 1418.10

iii) Interest accrued but not due - 144.64 144.64

Total (i+ii+iii) 3154.93 8235.24 - 11390.17

Change in Indebtedness during the

financial year -

* Addition - 1946.00 1946.00

* Reduction 128.09 128.09

Net Change 128.09 1946.00 - 1817.91

Indebtedness at the end of the financial

year 31.03.2015

i) Principal Amount 3026.84 8618.50 - 11645.34

ii) Interest due but not paid - 2200.60 2200.60

iii) Interest accrued but not due - 233.32 233.32

Total (i+ii+iii) 3026.84 11052.42 - 14076.26

( ` in lakhs )

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Sl.Particulars of Remuneration Name of MD/WTD/ Manager TotalAmount

no.

1. Gross salary(a) Salary as per provisions contained in

section 17(1) of the Income-tax Act,1961

(b) Value of perquisites u/s17(2) Income-tax Act,1961 Shri. Antony Chacko 252638

(c) Profits in lieu of salary under section 17(3)

Income- tax Act, 1961

2. Stock Option -

3. Sweat Equity -

4. Commission - as % of profit -

- others, specify…

5. Others - Medical 50012

Total (A) 302650

Ceiling as per the Act -

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Whole-time Directors:

B. Remuneration to other Directors:

Independent Directors : The President is the authority for appointment of Directors on the Board of Central

PSU’s and we have requested the Ministry to appoint Independent Directors to constitute mandatory commit-

tees and further to appoint a woman Director to comply with listing requirements and Companies Act 2103

Particulars of Remuneration Name of MD/WTD/ Manager Total Amount

- Fee for attending board/

committee meetings

- Commission

- Others, please specify

Total (1)

Other Non-Executive Directors

Particulars of Remuneration

Total (2)

Total (B)=(1+2)

Total Managerial Remuneration

Overall Ceiling as per the Act

N.A

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C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER /WTD

Sl.Particulars of Remuneration Key Managerial Personnel

No.

Antony Chacko SUBASH B K Total

DOP Company Secretary Rs.

up to May 2014 from June 20, 2014

1. Gross salary(a) Salary as per provisions

contained in section 17(1) of the 302650 608679 911329

Income-tax Act, 1961

(b) Value of perquisites u/s 17(2)

Income-tax Act, 1961

(c) Profits in lieu of salary under

section 17(3) Income-tax Act, 1961

2. Stock Option

3. Sweat Equity

4. Commission

- as % of profit

- others, specify…

5. Others, please specify

Total 302650 608679 911329

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

A. COMPANY

Penalty None

Punishment None

Compounding None

B. DIRECTORS

Penalty None

Punishment None

Compounding None

C. OTHER OFFICERS IN DEFAULT

Penalty None

Punishment None

Compounding None

Due to absence/inadequacy of profits the Company Could not take up any CSR Projects for the year 2014-15

Type Section the Brief Details of Penalty / Authority Appeal made,

Companies Act Description Punishment/ [RD/NCLT/ Court] if any

Compounding

fees imposed

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To

The Members

M/s. H.M.T. Limited

(CIN: L29230KA1953PLC000748)

HMT Bhavan, 59, Bellary Road,

Bangalore - 560 032

I have conducted the Secretarial Audit of the compliances

of applicable statutory provisions and the adherence to good

corporate practices by M/s. H.M.T. Limited (hereinafter

called the Company). Secretarial Audit was conducted in a

manner that provided me a reasonable basis for evaluating

the corporate conduct / statutory compliances and

expressing my opinion thereon.

Management’s Responsibility for Secretarial

Compliances:

The Company’s Management is responsible for preparation

and maintenance of secretarial records and for devising

proper systems to ensure compliance with the provisions

of applicable laws and regulations.

Auditor’s Responsibility:

My responsibility is to express an opinion on the secretarial

records, standards and procedures followed by the

Company with respect to secretarial compliances.

I believe that audit evidence and information obtained from

the Company’s management is adequate and appropriate

for me to provide a basis for my opinion.

Based on my verification of the Company’s books, papers,

minute books, forms and returns filed and other records

maintained by the Company and read with the Statutory

Auditors’ Report on Financial Statements and Compliance

of the conditions of Corporate Governance and also the

information provided by the Company, its officers, agents

Form No. MR-3Secretarial Audit Report for the financial year ended 31st March 2015

[Pursuant to section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules, 2014]

and authorized representatives during the conduct of

Secretarial Audit, I hereby report that in my opinion and to

the best of my information, knowledge and belief and

according to the explanations given to me, the company

has, during the audit period covering the financial year ended

on 31st March 2015 (Audit Period) generally complied with

the applicable statutory provisions listed hereunder and also

that the Company has proper Board - processes and

compliance mechanism in place to the extent, in the manner

and subject to the reporting made hereinafter:

I have examined the books, papers, minute books, forms

and returns filed and other records maintained by

M/s. H.M.T. Limited for the financial year ended on

31st March 2015 according to the provisions of:

1. The Companies Act, 2013 and the rules made there

under;

2. The Securities Contracts (Regulation) Act,

1956(‘SCRA’) and the rules made there under;

3. The Depositories Act, 1996 and the Regulations and

Bye- laws framed there under;

4. Foreign Exchange Management Act, 1999 and the

rules and regulations made there under to the extent

of Foreign Direct Investment, Overseas Direct

Investment and External Commercial Borrowings to

the extent applicable to the company - As reported

to us, there were no FDI, ODI or ECB transaction

in the company during the year under review.

5. The following Regulations and Guidelines prescribed

under the Securities and Exchange Board of India

Act, 1992(‘SEBI Act’) to the extent applicable to the

company:-

a. The Securities and Exchange Board of India

(Substantial Acquisition of Shares and

Takeovers) Regulations, 2011;

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29

b. The Securities and Exchange Board of India

(Prohibition of Insider Trading) Regulations, 1992;

c. The Securities and Exchange Board of India

(Issue of Capital and Disclosure requirements)

Regulations, 2009.

d. The Securities and Exchange Board of India

(Employee Stock Option Scheme and Employee

Stock Purchase Scheme) Guidelines, 1999 -

No instances were reported during the year.

e. The Securities and Exchange Board of India

(Issue and Listing of Debt Securities)

Regulations, 2008 - No instances were

reported during the year.

f. The Securities and Exchange Board of India

(Registrars to an issue and Share Transfer

Agents) Regulations, 1993 regarding the

Companies Act and dealing with client - The

Company has appointed a SEBI authorised

Category I Registrar and Share Transfer

Agent.

g. The Securities and Exchange Board of India

(Delisting of Equity Shares) Regulations, 2009;

- No de-listing was done during the year

h. The Securities and Exchange Board of India

(Buyback of Securities) Regulations, 1998; - No

buy - back was done during the year.

I have also examined compliance with the applicable

clauses of the following:

a. Secretarial Standards with respect to Board and

general meetings issued by The Institute of

Company Secretaries of India (Since these

Secretarial Standards have come into effect from

1st July 2015), not applicable to the Company

during the audit period under review.

b. Listing Agreements entered into by the Company

with the National Stock Exchange of India Limited

and Bombay Stock Exchange Limited.

During the period under review and as per the explanations

and representations made by the management and subject

to clarifications given to me, the company has generally

complied with the provisions of the Act, Rules, Regulations,

Guidelines, Standards etc mentioned above, subject to the

following:

• During the year under review, the company

did not have the required number of non-

executive directors, Independent Directors

and atleast one woman director as on 31st

March 2015 in terms of Section 149(1)/(4) of

the Companies Act, 2013 and Clause 49 of

the Listing Agreement.

However, we were informed that M/s. H.M.T. Limited

is a Government company under the administrative

control of Ministry of Heavy Industries & Public

Enterprises. The nomination and appointment of all

categories of Directors are done by the Government

of India in accordance with the laid down Department

of Heavy Industry Guidelines. The subject matter of

nomination / appointment of adequate number of

Independent directors including woman director falls

under the purview of the Government of India. The

Company has communicated to the Administrative

Ministry with respect to the requirements and were

informed of actions initiated to fulfil the requirements.

• The Company has not appointed Chief

Financial Officer in accordance with the

provisions of Section 203 of the Companies

Act, 2013 during the period under review.

• The Company has not constituted any of the

following Committees:

a. Audit Committee.

b. Remuneration and Nomination

Committee.

c. Shareholders Grievance Committee.

d. Vigil Mechanism.

e. Risk Management Committee.

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• The Company has not submitted to the Stock

Exchanges, Audited Financial Statements for

the financial year 2013-14, within 60 days from

the end of the financial year (Clause 41 of the

Listing Agreement).

• Filing of requisite forms on the MCA Portal,

for some of the Directors, whose nominations

are withdrawn by the Government of India

have not been done so far.

• No actuary valuation has been obtained in

respect of contributions required for

Provident Fund liability by the Company as

per the requirements of AS-15 “Employee

Benefits”.

I further report that:

a. The Board of Directors of the Company is not

duly constituted with proper balance of Executive

Directors and Non-Executive Directors. The

changes in the composition of the Board of

Directors that took place during the period under

review were carried out in compliance with the

provisions of the Act.

b. Adequate notice was given to all the directors to

schedule the Board Meetings, agenda and

detailed notes on agenda were sent at least

seven days in advance, and a system exists for

seeking and obtaining further information and

clarifications on the agenda items before the

meeting and for meaningful participation at the

meeting.

c. Decisions at the Board Meetings, as represented

by the management, were taken unanimously.

d. I further report that as represented by the

Company and relied upon by me there are

adequate systems and processes in the

Company commensurate with the size and

operations of the Company to monitor and ensure

compliance with applicable laws, rules,

regulations and guidelines.

D VENKATESWARLU

Company Secretary

ACS No. 15683: C P No. 7773

Place: Bangalore

Date: 10th August 2015

This Report is to be read along with my letter of even

date which is annexed as Annexure A and Forms an

integral part of this report.

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“Annexure A”

To

The Members

M/s. HMT Limited

(CIN: L29230KA1953PLC000748)

HMT Bhavan, 59, Bellary Road,

Bangalore - 560 032

My report of even date is to be read along with this letter.

1. Maintenance of secretarial records is the responsibility of the management of the Company. My responsibility is

to express an opinion on these secretarial records based on my audit.

2. I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the

correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that

correct facts are reflected in secretarial records. I believe that the processes and practices, I followed provide a

reasonable basis for my opinion.

3. I have not verified the correctness and appropriateness of financial records and Books of Accounts of the

company.

4. Wherever required, I have obtained the Management representation about the compliance of laws, rules and

regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the

responsibility of the management. My examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy

or effectiveness with which the management has conducted the affairs of the company.

Place: Bangalore D VENKATESWARLU

Date: 10th August 2015 Company Secretary

ACS No. 15683: C P No. 7773

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ADDENDUM TO SECRETARIAL REPORT FOR THE YEAR 2014-15 IN RESPECT

OF OBSERVATIONS MADE BY SECRETARIAL AUDITOR ON THE SECRETARIAL

AUDIT OF HMT LIMITED FOR THE YEAR ENDED 31ST MARCH 2015.

Ref. SECRETARIAL AUDITORS’ OBSERVATIONS COMPANY’S REPLY

1.

2.

3.

During the year under review, the company did not have the

required number of non-executive directors, Independent

Directors and atleast one woman director as on 31st March

2015 in terms of Section 149(1)/(4) of the Companies Act,

2013 and Clause 49 of the Listing Agreement.

The Company has not appointed Chief Financial Officer in

accordance with the provisions of Section 203 of the

Companies Act, 2013 during the period under review

The Company has not submitted to the Stock Exchanges,

Audited Financial Statements for the financial year 2013-

14, within 60 days from the end of the financial year (Clause

41 of the Listing Agreement).

As observed by the Audit, H.M.T. Limited is a Gov-

ernment company under the administrative con-

trol of Ministry of Heavy Industries & Public Enter-

prises, the nomination and appointment of all cat-

egories of Directors are done by the Government

of India in accordance with the laid down Depart-

ment of Heavy Industry Guidelines. The subject

matter of nomination / appointment of adequate

number of Independent directors including woman

director falls under the purview of the Government

of India. The Company has requested the Admin-

istrative Ministry to appoint Independent Directors

and also Woman Director to comply with the provi-

sions of Companies Act 2013 and Listing require-

ments.

Additional Charge of the post of the Director Fi-

nance given to Shri P.Sivarami Reddy on

26.05.2014 which extended upto 25.5.2015. Since,

Director Finance is the de-facto CFO there is no

violation as observed by Audit.

The Stock Exchanges were informed that the

Company’s Subsidiaries viz., HMT Machine Tools

Ltd, HMT Watches Ltd, HMT Chinar Watches Ltd,

HMT Bearings Ltd are loss making Companies

and the units are located at different places across

India. There was delay in finalization of the ac-

counts of these Subsidiaries and accordingly Au-

dit. Therefore. there was delay in finalization of

the consolidated financial statements and sub-

mission of same to Stock Exchanges.

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Ref. SECRETARIAL AUDITORS’ OBSERVATIONS COMPANY’S REPLY

4.

5.

6.

The Company has not constituted any of the following

Committees:

• Audit Committee.

• Remuneration and Nomination Committee.

• Shareholders Grievance Committee.

• Vigil Mechanism.

• Risk Management Committee.

Filing of requisite forms on the MCA Portal, for some of the

Directors, whose nominations are withdrawn by the

Government of India have not been done.

No actuary valuation has been obtained in respect of

contributions required for Provident Fund liability by the

Company as per the requirements of AS-15 “Employee

Benefits”.

Consequent to change/cessation of Directors on

the Board, the Government has been requested

to appoint Independent Directors to comply with

the Listing requirements and provisions of Com-

panies Act, 2013. The mandatory committees will

be constituted immediately after appointment of

independent directors on the Board of the Com-

pany

The observation of Secretarial Auditor is noted.

Action will be taken to rectify the same.

This point has been replied in Addendum to Direc-

tors’ Report in respect of observations made by

Statutory Auditors.

(S.Girishkumar)

Chairman & Managing Director

Place: Bangalore

Dated: 10.08.2015

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CERTIFICATE ON CORPORATE GOVERNANCETo

The Members of HMT Limited,

We have examined the compliance of conditions of Corporate Governance by HMT Limited for the year ended on 31st

March 2015, as stipulated in clause 49 of the Listing Agreement of the said Company with stock exchanges.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination has

limited to a review of the procedures and implementation thereof adopted by the Company for ensuring compliance with

the conditions of the Corporate Governance as stipulated in the said Clause. It is neither an audit nor an expression ofr

opinion the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us and based on the

representations and made by the Directors and the Management, we certify that the Company has complied with the

conditions of Corporate Governance as stipulated in Clause 49 of the above-mentioned Listing Agreement.

We state that such comploiance is neither an assurance as to future viability of the Company nor of the efficiency or

effectiveness with which the management has conducted the affairs of the Company.

For M/s. DOKANIA S.KUMAR & CO.

Firm Registration Number : 322919E

CHARTERED ACCOUNTANTS

(CA. Sushil Kumar Dokania)

Partner

Membership No. 057020

DECLARATION BY THE CHAIRMAN & MANAGING DIRECTOR

WITH THE COMPANY’S CODE OF CONDUCT

This is to certify that:

The Company has adopted a Code of Conduct for its employees including the Chairman & Managing Director and Senior

Management. A Code of Conduct for the Board Members and Senior Management and for the Part-time Directors has

been approved by the Board.

The said Code of Conduct has been uploaded on the website of the Company and has also been circulated to the Board

Members and the Senior Management Personnel of the Company; and,

All Board Members, both Full time and Part-time and the Senior Management have affirmed compliance of the said Code

of Conduct, for the year ended March 31, 2015.

(S. Girish Kumar )

Chairman & Managing Director

Place: Bangalore

Date: 09/07/2015

Place: Howrah

Date : 09/07/2015

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35

CEO & CFO CERTIFICATION

This is to certify to the Board of Directors of HMT Limited that:

a) We have reviewed the financial statements and the cash flow statement for the year 2014-15

and that to the best of our knowledge and belief :

i. these statements do not contain any materially untrue statement or

omit any material fact or contain statements that might be misleading;

ii. these statements together present a true and fair view of the Company’s affairs and

are in compliance with the existing accounting standards, applicable laws and

regulations.

b) There are, to the best of our knowledge and belief, no transactions entered into by the Company

during the year which are fraudulent, illegal or violative of the Company’s code of conduct.

c) We accept responsibility for establishing and maintaining internal controls for financial reporting

and that we have evaluated the effectiveness of internal control systems of the Company

pertaining to financial reporting and we have disclosed to the Auditors and the Audit Committee,

deficiencies in the design or operation of such internal controls, if any, of which we are aware

and the steps we have taken or propose to take to rectify these deficiencies.

d) We have indicated to the Auditors and the Audit committee that :

i. No significant changes in internal control over financial reporting during the year;

ii. No significant changes in accounting policies during the year and same have been

disclosed in the notes to the financial statements; and

iii. no instances of significant fraud of which we have become aware and the involvement

therein, if any, of the management or an employee having a significant role in the

company’s internal control system over financial reporting.

For HMT Limited

Bengaluru P.Sivarami Reddy S.Girish Kumar

DFN/CFO CMD/CEO

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36

INDEPENDENT AUDITOR’S REPORT

To

The Members of

HMT Limited,

Bangalore

Report on the Standalone Financial Statements:

We have audited the accompanying standalone financial

statements of HMT Limited (the Company), which

comprises of the Balance Sheet as at 31st March 2015,

the Statement of Profit and Loss and the Cash Flow

Statement for the year then ended, and a summary of the

significant accounting policies and other explanatory

information, annexed hereto in which are incorporated the

accounts of Corporate Head Office audited by us and the

accounts of Tractor Division-Pinjore, Food Processing Unit-

Aurangabad and Common Service Division-Bangalore

audited by the Branch Auditors appointed by the C&AG of

India, has been forwarded to us as required by the

Companies Act, 2013, which have been dealt with while

preparing our report in the manner considered necessary

by us.

Management’s Responsibility for the Standalone

Financial Statements:

The Company’s Board of Directors is responsible for the

matters stated in Section 134(5) of the Companies Act ,

2013 (‘the Act’) with respect to preparation and presentation

of these standalone financial statements that give a true

and fair view of the financial position, financial performance

and cash flows of the company in accordance with the

accounting principles generally accepted in India, including

accounting standards specified under section 133 of the

Act read with Rule 7of the Companies (Accounts) Rules,

2014. This responsibility also includes maintenance of

adequate accounting records in accordance with the

provisions of the Act for safeguarding the assets of the

Company and for preventing and detecting frauds and other

irregularities; selection and application of appropriate

accounting policies; making judgments and estimates that

are reasonable and prudent; and design, implementation

and maintenance of adequate internal financial controls,

that were operating effectively for ensuring the accuracy

and completeness of the accounting records, relevant to

the preparation and presentation of the financial statements

that give a true and fair view and are free from material

misstatement, whether due to fraud or error.

Auditors’ Responsibility:

Our responsibility is to express an opinion on these

standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the

accounting and auditing standards and matters which are

required to be included in the audit report under the provisions

of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards

on Auditing specified under Section 143(10) of the Act.

Those Standards require that we comply with ethical

requirements and plan and perform the audit to obtain

reasonable assurance about whether the financial

statements are free from material misstatement

An audit involves performing procedures to obtain audit

evidence about the amounts and the disclosures in the

financial statements. The procedures selected depend on

the auditor’s judgment, including the assessment of the

risks of material misstatement of the financial statements,

whether due to fraud or error. In making those risk

assessments, the auditor considers internal financial control

relevant to the Company’s preparation and presentation of

the financial statements that give a true and fair view in

order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an

opinion on whether the Company has in place an adequate

internal financial controls system over financial reporting

and the operating effectiveness of such controls. An audit

also includes evaluating the appropriateness of the

accounting policies used and the reasonableness of the

accounting estimates made by the Company’s Directors,

as well as evaluating the overall presentation of the financial

statements.

We believe that the audit evidence we have obtained is

sufficient and appropriate to provide a basis for our audit

opinion on the financial statements.

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37

Basis of our Qualified Opinion

CHO:

1. No actuarial valuation has been obtained in

respect of contributions required for Provident Fund

liability by the Company as per the requirements

of AS – 15 “Employee Benefits”. The amount of

contribution to Provident Fund is ` 26.30 Lakhs

during the year under audit.

2. The amount of Gratuity Provision (Unfunded) to be

recognized in Balance Sheet as per actuary valua

tion report is ` 6,842.12 Lakhs. Whereas as per

Note No. 5 & Note No. 9 the aggregate provision

amounts to ` 6,857.34 Lakhs.

Tractor Division, Pinjore:

1. No actuarial valuation has been obtained with re

spect to the provisions made for Provident Fund

and Outstanding amount has been shown amount

ing to ` 2,174.38 Lakhs

Opinion:

In our opinion and to the best of our information and

according to the explanations given to us, and based on

the consideration of the reports of other Branch Auditors,

except for the effects of the matter described in the “Basis

for Qualified Opinion” paragraph, the aforesaid standalone

financial statements give the information required by the

Act in the manner so required and give a true and fair view

in conformity with the accounting principles generally

accepted in India, of the state of affairs of the Company as

at 31st March, 2015, and its loss and its cash flow for the

year ended on that date,

Other Matters:

1. We did not audit the financial statements of cer

tain branches/units. These have been audited by

other Branch Auditors whose reports have been

furnished to us and our opinion is solely based on

the reports of Other Branch Auditors.

2. The financial statements of Lamp Division have

been merged with CHO Accounts and our report

insofar as it relates to the amounts included in re

spect of this Division is based solely on Closing

Balances of Last Year’s Financial Statement of CHO

Accounts.

3. The Physical share certificates for 26,08,99,037

Equity Shares of M/s. HMT Machine Tools Ltd

having value of 26,089.90 Lakhs and 4,43,00,000

Preference Shares of M/s. HMT Machine Tools Ltd

having value of ` 44,300.00 Lakhs are not in the

possession of the Company.

4. Payments to third parties are being made relating

to SUDMO-HMT Engineering (India) Ltd, an asso

ciate, are paid by the Company against which it

receives the reimbursements from them.

5. The Branch Auditors of Tractor Division, Pinjore have

Reported the following other matters:

a) Balance in Current Maturities of GOI Loans –

Statutory Dues and Working Capital and Bridge

Loan as given in Note – 9 of Balance Sheet

amounting ` 2148.64 Lakhs has been given and

we have relied on the basis of the Certificate

received from the Management.

b) During the year 2014-15, the Management has

declared doubtful debts amounting ` 4410.10

Lakhs which is very high in percentage and full

provision has been made in the Profit & Loss

Account and accordingly, provision has been made

of interest receivable on debts amounting

` 4756.73 Lakhs and we have relied upon the

certificate obtained from the Management.

c) During the year 2014-15, the provision for

obsolesce has been shown by the Company

amounting ` 438.29 Lakhs and we have relied

upon the Certificate received from the Management

of the Company. These matters give an

unmodified opinion on Financial Statements of the

unit.

Report on Other Legal and Regulatory Requirements:

1. As required by Section 143 (5) of the Act, our sub

missions are as under:

a. we give in the Annexure ‘A’, a statement

on the compliance to Directions issued by

the Comptroller and Auditor General of

India

b. we give in the Annexure ‘B’, a statement

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38

on the compliance to specific sub

directions issued by the Principal

Director, Commercial Audit and Ex-Officio

Member, Audit Board, Hyderabad

2. As required by the Companies (Auditor’s Report)

Order, 2015 (‘the Order’) issued by the Central

Government of India in terms of sub-section (11) of

section 143 of the Act, we give in the Annexure

‘C’, a statement on the matters specified in the

paragraph 3 and 4 of the Order, to the extent

applicable.

3. As required by Section 143(3) of the Act, we

report that

a) we have sought and obtained all the

information and explanations which to the

best of our knowledge and belief were

necessary for the purposes of our audit.

b) in our opinion, proper books of account

as required by law have been kept by the

Company so far as it appears from our

examination of those books;

c) the Balance Sheet, the Statement of Profit

and Loss and the Cash Flow Statement

dealt with by this Report are in agreement

with the books of account;

d) in our opinion, the aforesaid standalone

financial statements comply with the

Accounting Standards specified under

Section 133 of the Act, read with Rule 7 of

the Companies (Accounts) Rules, 2014

with an exception to those mentioned in

the paragraph of Basis for Qualified

Opinion and Other matters;

e) on the basis of the written representations

received from the directors as on 31 March,

2015 taken on record by the Board of

Directors, none of the directors is

disqualified as on 31 March, 2015 from

being appointed as a director in terms of

Section 164 (2) of the Act; and

f) with respect to the other matters to be

included in the Auditor ’s Report in

accordance with Rule 11 of the

Companies (Audit and Auditors) Rules,

2014, in our opinion and to the best of our

information and according to the

explanations given to us:

i. the Company has disclosed the impact

of pending litigations on its financial

position in its Financial Statement as

referred to in Note No. 39 (A) to 39 (E) to

the Financial Statement.

ii. The Company has made provision, as

required under the applicable law or

accounting standards, for material

foreseeable losses, if any, and as required

on long-term contracts including

derivative contracts; and

iii. There were no amounts, required to be

transferred, to the Investor Education and

Protection Fund by the Company.

For M/s. DOKANIA S.KUMAR & CO.

Firm Registration Number : 322919E

CHARTERED ACCOUNTANTS

(CA. Sushil Kumar Dokania)

Partner

Membership No. 057020

Place: Howrah

Date: 09 -07-2015

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39

ANNEXURE ‘C’ TO THE INDEPENDENT AUDITORS REPORT

I. a) The company has maintained proper records

showing full particulars, including quantitative

details and situations of Fixed Assets on the

basis of available information.

b) The Company has a regular programme of

physical verification of its moveable fixed

assets by which they are verified in a phased

manner over a period of three years. In

accordance with the programme, some fixed

assets have been verified during the year and

management has confirmed that no material

discrepancies were noticed on such physical

verification when compared with the book

records. In our opinion, the periodicity of three

years is reasonable having regard to the size

of the Company and the nature of its assets.

II. a) The management has conducted physical

verification of inventory at reasonable intervals

during the year. In our opinion the frequency

of verification is reasonable.

b) The procedures of physical verification of

inventory followed by the management are

reasonable and adequate in relation to the size

of the company and nature of its business.

c) The company is maintaining proper records

of inventory and management has confirmed

that no material discrepancies were noticed

on such physical verification when compared

with the book records.

III. a) As informed to us, the company has granted

loans to the bodies corporate, but has not

maintained a register U/s 189 of the

Companies Act, 2013.

b) In the case of granting of loans to body

corporates, the borrowers have been regular

in the payment of interest. The terms of

agreements do not stipulate any repayment

schedule and the loans are repayable on

demand. Accordingly, Sub-Clause (b) of the

Clause (iii) of the Paragraph 3 of the Order is

not applicable.

c) According to the information given to us, there

are no overdue amounts more than Rupees

One Lakh in respect of the loans granted to

the bodies corporate.

IV. In our opinion and according to the information and

explanations given to us, there are adequate internal

control procedures commensurate with the size of

the company and nature of its business for the

purchase of inventory and fixed assets and for the

sale of its goods and services. During the course of

our audit, we have not observed any continuous failure

to correct major weakness in internal control system.

V. According to the information and explanations given

to us, the company has not accepted any deposits

from the public during the year. Hence, the provisions

relating to this clause of the order are not applicable.

VI. The Company has maintained cost records pursuant

to the Rules made by the Central Government under

Section 148 (1) of the Act. On the broad review of

the accounts by the Branch Auditors of Tractor

Division-Pinjore prima facie they are of the opinion

that the prescribed accounts and records have been

made and maintained. The respective Branch

Auditors of Food Procssing Unit, Aurangabad have

broadly reviewed such records and prima facie, they

are of the opinion that the prescribed accounts and

records have been made and maintained.

Maintenance of Cost records is not prescribed at

Corporate Head Office and Common Service Division.

VII. In respect of Statutory Dues:

a) According to the information & explanations

given to us and on the basis of examination of

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40

the records of the company, undisputed

Statutory dues including provident fund,

employees’ state insurance, income tax,

wealth-tax, service tax, customs duty, excise

duty, value added tax, cess and other material

statutory dues have been generally regularly

deposited with the appropriate authorities.

There are no outstanding amounts of Statutory

dues on account of as on the last date of the

Financial Year concerned for a period of more

than 6 months from the date they became

payable except the following:

The records of CHO, report the irregularities as under:

Sl. Nature of the Nature of Amount Period to which

No. Statute Dues (`) amount related

1. Income Tax* TDS Defaults 349613.95 2014 – 15

2. Income Tax* TDS Defaults 1882503.25 2013- 14

3. Income Tax* TDS Defaults 2059936.74 2012-13

4. Income Tax* TDS Defaults 180257.95 2011-12

5. Income Tax* TDS Defaults 5182992.87 Prior Years

6. Greater Hyderabad Property Tax 5218224.00 Previous Years

Municipal 7815398.00 Arrear Penalty

Corporation 4776018.00 Current Tax

TOTAL 37464944.76

* Income Tax Website

The auditors of Tractor Division, Pinjore reports the irregularities as under:

Sl. Nature of the Nature of Amount Period to which

No. Statute Dues (`) amount related

1. Pinjore Sales Tax Interest on Demand 21773033.00 2001-02 to 2005-06

2. Sales Tax Sales/ VAT Tax 2001521.00 November 2013

-September 2014

3. CPF Provident Fund 49849972.00 Nov 2013 – Sept 2014

4. EPF Provident Fund 52246226.00 Nov 2013 – Sept 2014

5. EPS Provident Fund 3718381.00 Nov 2013 – Sept 2014

6. VPF Provident Fund 28928500.00 Nov 2013 – Sept 2014

7. PF Loan and Interest Provident Fund 53935211.00 Nov 2013 – Sept 2014

8. Professional Tax Professional Tax 10200.00 Nov 2013 – Sept 2014

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41

c) According to the information and explanations given to us, no amounts were required to be transferred to the

investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of

1956) and rules there under.

b) According to the information & explanations given to us, there are no dues outstanding with respect to income-tax,

wealth-tax, service tax, customs duty, excise duty, value added tax or cess on account of any disputes. However,

according to the information and explanations given to us, the following dues of Sales Tax have not been deposited

by the Company on account of disputes:

The Branch Auditors of Food Processing Unit, Aurangabad have reported that there is dues of Sales Tax on

account of dispute and the details are as under:

Sr. No. Name of Authority Amount ( Lakhs) Period

1. Appeal before 2.96 1989-90

2. Joint Commissioner 39.05 1999-00

3. (Appeal), Aurangabad 25.71 2000-01

4. 14.78 2001-02

5. 13.48 2003-04

6. 9.35 2004-05

TOTAL 105.33

Appeal before

Joint Commis-

sioner (Appeal),

Aurangabad

VIII The accumulated losses of the Company are

` 95,828.07 Lakhs (Previous Year-`86,024.58 Lakhs)

at the end of financial year. The Company has incurred

cash losses of 9,385.31Lakhs during the financial

year covered by our audit and no cash losses were

incurred in the immediately preceding financial year.

The said accumulated losses are more than 50% of

its net worth as at the end of the financial year.

IX. In our opinion and according to the information and

explanations given to us, the company has not

continued defaults in repayment of dues to the

financial institutions or banks or Govt of India. Hence,

the provisions relating to this clause of the order are

not applicable.

X. In our opinion and according to the information and

the explanations given to us, the Company has not

given any guarantee for loans taken by others from

banks or financial institutions. Hence, the provisions

relating to this clause of the order are not applicable.

XI According to the information and explanations given

to us by the management and on overall examination

of the Balance Sheet, no term loans were taken by

the company. Hence, the provisions relating to this

clause of the order are not applicable.

XIII. According to the information and explanations given

to us, no material fraud on or by the Company has

been noticed or reported during the year. Hence, the

provisions relating to this clause of the order are not

applicable.

For M/s. DOKANIA S.KUMAR & CO.

Firm Registration Number : 322919E

CHARTERED ACCOUNTANTS

(CA. Sushil Kumar Dokania)

Partner

Membership No. 057020

Place: Howrah

Date: 09/07/2015

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Annexure ‘A’ to the Independent Auditors’ Report

The Annexure referred to in our Independent Auditors’ Report to the members of the Company on the Standalone financial

statements for the year ended 31 March 2015, we report that:

Sl. No. Directions Auditor Observations

1. If the Company has been selected for disinvestment, The Company has not been selected for

a complete status report in terms of valuation of disinvestment.

Assets (including intangible assets and land) and

Liabilities (including Committed & General Reserves)

may be examined including the mode and present

stage of disinvestment process.

2. Please report whether there are any cases of waiver/ No such cases have been noticed by us.The

write off of debts/loans/interest etc., if yes, the Auditors of Tractor Division, Pinjore have reported:

reasons there for and the amount involved. The Unit has written off debts worth `346.90 Lacs

during the Financial Year 2014-15 after obtaining

approval from the Board of Directors.

3. Whether proper records are maintained for inventories No inventories are maintained at CHO Level.

lying with third parties & assets received as gift from Proper records have been maintained for assets

Govt. or other authorities. received as gift from Govt. or other authorities

As per the Report of Branch Auditors, proper

records have been maintained for inventories lying

with third parties & assets received as gift from

Govt. or other authorities.

4. A report on age-wise analysis of pending legal/ As per explanations given to us, there are no

arbitration cases including the reasons of pendency pending legal/ arbitration cases at the CHO

and existence/ effectiveness of a monitoring Level.The age wise analysis of pending legal/

mechanism for expenditure on all legal cases arbitration cases of Other Units are enclosed in

(foreign and local) may be given. ‘Annexure A-1’

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Annexure ‘A-1’ to the Annexure ‘A’ of the Independent Auditors’ Report

The Annexure referred to in Annexure ‘A’ to our Independent Auditors’ Report to the members of the Company on the

Standalone financial statements for the year ended 31 March 2015:

As per Audit Report of Tractor Division, Pinjore:

Year of Lodgement No. of Cases Reason for Pendancy

2014-15 8 Not provided by the Branch Auditor

2013-14 24 Not provided by the Branch Auditor

2012-13 20 Not provided by the Branch Auditor

Prior to 2012-13 114 Not provided by the Branch Auditor

As per Audit Report of Food Processing Unit, Aurangabad:

Year of Lodgement No. of Cases Reason for Pendancy

3331/1995 1 As a result of legal process

56/2002 1 As a result of legal process

272/2002 1 As a result of legal process

115/2010 1 As a result of legal process

21063/2012 2 As a result of legal process

Year of Lodgement No. of Cases Reason for Pendancy

OS 4916/2004 1 Cases being argued as time barred debts and hearing continued.

NDOH for further evidence during 3rd June, 2015 (out of court settlement

is being explored)

SLP 13010/2006 1 Last Listed on during July, 2011

214/2006 1 Argument Stage. Next date of hearing on 01.06.2015

WA 4151/09 arising out Writ Appeal admitted on 20.10.2010 listed on 18.02.2015, case put up

W P No. 4166/08 1 for another bench.

2011 1 Writ petition to be filed in High Court or Dispute before Registrar of

Co. Op. Society

MA 51/2013 1 Next Date of hearing on 20.06.2015

MA 50/2013 1 Next Date of hearing on 20.06.2015

CA 387/2013 1 Not yet listed

As per Audit Report of Common Service Division:

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Annexure ‘B’ to the Independent Auditors’ Report

The Annexure referred to in our Independent Auditors’ Report to the members of the Company on the Standalone financial

statements for the year ended 31 March 2015, we report that:

Sl. No. Directions Auditor Observations

1. Examine and Comment on Compliance of Accounting No actuarial valuation of provident fund is being

Standard – 15 w.r.t. actuarial valuation of provident fund obtained by the Company.

and adequacy of liability provision towards the same

The Auditors of Tractor Division, Pinjore have

reported: During the financial year 2014-15 actuarial

valuation has not been obtained by the Company

with regard to provident fund and outstanding

amount has been shown amounting to 2,174.38

Lacs

2. Examine and comment on the sufficiency and At Corporate Head Office Level, Accounting

consistency of Accounting Policy of the company for Standard – 9 has been properly complied with.

revenue recognition w.r.t. compliance with the

provisions of Accounting Standard-9 (Revenue The Auditors of Tractor Division, Pinjore:The Unit is

Recognition) sufficiently and consistently following the Accounting

Policy of the Company for Revenue Recognition as

per AS-9.

The Auditors of Food Processing Unit,

Aurangabad:The Unit has been consistently

following completed sales and service contract

method for recognition of revenue.

As per Audit Report of Common Service Division:

The unit has been consistently following completed

service contract method of recognition of revenue

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COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION

143(6)(b) OF THE COMPANIES ACT, 2013 ON THE ACCOUNTS OF HMT LIMITED, BANGALORE

FOR THE YEAR ENDED 31 MARCH 2015.

The preparation of financial statements of HMT Limited, Bangalore for the year ended on 31 March 2015 in accordance

with the financial reporting framework prescribed under the Companies Act, 2013 is the responsibility of the management

of the Company. The Statutory Auditor appointed by the Comptroller and Auditor General of India under Section 139(5)

of Act, is responsible for expressing opinion on these financial statements under Section 143 of the Act based on the

independent audit in accordance with the Standards on Auditing prescribed under Section 143 (10) of the Act. This

is stated to have been done by them vide their Audit Report dated 09 July 2015.

I, on the behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under Section

143(6) (a) of the Act of the financial statements of HMT Limited, Bangalore for the year ended on 31 March 2015. This

supplementary audit has been carried out independently without access to the working papers of the Statutory Auditors

and is limited primarily to inquiries of the Statutory Auditor and company personnel and a selective examination of

some of the accounting records. On the basis of my audit, nothing significant has come to my knowledge, which would

give rise to any comment upon or supplement to Statutory Auditor’s report.

For and on behalf of the

Comptroller and Auditor General of India

( Pravindra Yadav )

Principal Director of Commercial Audit &

Ex-Officio Member, Audit Board

Hyderabad

Place : Hyderabad

Date : 01 September 2015

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46

SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation of financial statements

The financial statements are prepared as of a going concern,

under the historical cost convention, on accrual basis of

accounting and in accordance with the provisions of the

Companies Act, 2013 and comply with the mandatory

Accounting Standards prescribed under Section 133 of

Companies Act 2013, read with Rule 7 of Companies

(Accounts) Rules 2014, the provisions of the Act (to the

extent notified) and guidelines prescribed by the Securities

& Exchange Board of India (SEBI).

Fixed Assets

Fixed Assets are stated at cost of acquisition or construction,

net of Cenvat credit, less accumulated depreciation to date.

Cost includes direct costs and financing costs related to

borrowing attributable to acquisition that are capitalized until

the assets are ready for use.

Land received free of cost from the State Governments has

been nominally valued and incidental expenditure incurred

thereon has been capitalized.

Expenditure on development of land is included in the cost

of land.

Assets taken on Finance Lease are capitalized at fair value

/ NPV / contracted price. Depreciation on the same is

charged at the rate applicable to similar type of fixed assets

as per Accounting Policy on “Depreciation”. If the lease

assets are returnable to the lessor on expiry of lease period,

the same is depreciated over its useful life or lease period,

whichever is shorter.

Lease payments made are apportioned between finance

charges and reduction of outstanding liability in relation to

assets taken on lease.

Lease payments made for assets taken on Operating Lease

are recognized as expense over the lease period.

Expenditure incurred on Reconditioning of plant, machinery

and equipment which increases the future benefits from

the existing asset beyond its previously assessed standard

of performance is included in the Gross Book Value which

results in:

(a) Modification of an item of plant to extend its useful

life, including increase in its capacity;

(b) Upgrading machine parts to achieve a substantial

improvement in the quality of out-put; and

(c) Adoption of new production processes enabling a

substantial reduction in previously assessed

operating costs.

The cost of an addition or extension to an existing asset

which is of a capital nature and which becomes an integral

part of the existing asset is added to its gross block value.

The expenditure on Reconditioning of plant, machinery &

equipment which do not increase the future benefits from

the existing asset beyond the previously assessed standard

of the performance based on the technical assessment, is

charged off to Revenue.

Items of Capital Assets with WDV of ` 1 lakh and above,

which have been retired from active use, are disclosed at

lower of book value or net realizable value and shown

separately in the Fixed Assets Schedule.

Depreciation

Depreciation on fixed assets is provided on straight line

basis over the useful life of the various assets as prescribed

in Schedule II to the Companies Act, 2013, pro-rata with

reference to the date of addition or deletion. As and when

assets gets fully depreciated, 1/- is retained as book value

of the asset. Assets costing less than ` 10,000/- shall be

depreciated to ` 1/- in the year of purchase.

Depreciation on fixed assets is calculated on a pro-rata

basis from the date of such addition or as the case may be

up to the date on which such asset is sold, discarded or

destroyed.

Useful life specified in the Schedule is for whole of the asset.

Where cost of a part (component) of the asset is significant

to total cost of asset and useful life of that part is different

from the useful life of the remaining asset:-

a. If addition / replacement of the part (component)

enhances the useful life / capacity of the asset,

the useful life shall be reassessed & accordingly

depreciation to be provided;

b. If the addition / replacement of the part (component)

does not enhance the useful life / capacity of the

asset, the same shall be charged to P&L.

Premium for leasehold land is amortized equally over the

period of lease.

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47

Investments

Investments are either classified as current or long-term.

Current investments are carried at lower of cost and fair

value. Long-term investments are carried at cost and

provisions recorded to recognize any decline, other than

temporary, in the carrying value of each investment. Gain

or loss is recognized in the year of sale.

Inventories

Inventories are valued at the lower of cost and net realizable

value. The cost of materials is ascertained by adopting

Weighted Average Cost Method.

Revenue recognition

Sales are set up based on:

Physical delivery of goods to the customer / customer’s

carrier /common carrier, duly supported by invoice, excise

duty paid challan, gate pass, delivery voucher and LR /

GR, in case of ex-works contracts.

LR/GR obtained and endorsed in favour of customer

(consignee ‘self’), in case of FOR destination contracts.

Despatches to dealers/customers in respect of Machines

& Tractors.

Sales include Excise Duty but are net of trade discount

and exclude sales tax.

Foreign currency transactions

Transactions in foreign currency are recorded in Indian rupee

by applying to the foreign currency amount the exchange

rate existing at the time of the transaction.

The outstanding balances of monetary items relating to

foreign currency transactions are stated in Indian rupee by

adopting the rate of exchange prevailing at the date of

Balance Sheet. Exchange differences consequent to

reinstatement are credited / charged to revenue.

The gain or loss in the conversion and / or settlement of

liabilities incurred for acquisition of fixed assets is either

credited or charged to revenue during the period such gain

or loss arise.

In the case of forward exchange contracts, the premium or

discount arising at the inception of the contract is accounted

for over the life of the contract. Exchange differences on

such a contract are recognized in the statement of profit or

loss in the reporting period in which the exchange rate

changes.

Borrowing costs

Borrowing costs are charged to revenue except those which

are incurred on acquisition or construction of a qualifying

asset that necessarily takes substantial time to be ready

and until intended use of the said asset, such costs are

capitalized.

Employee Benefits

Provident Fund is provided for, under a defined benefit

scheme. The contributions are made to the Trust

administered by the company.

Leave encashment is provided for under a defined benefit

scheme based on actuarial valuation.

Gratuity is provided for, under a defined benefit scheme, to

cover the eligible employees, liability being determined on

actuarial valuation. Annual contributions are made, to the

extent required, to a trust constituted and administered by

the Life Insurance Corporation of India under which the

coverage is limited to 50,000/- per eligible employee. The

balance provision is being retained in the books to meet

any additional liability accruing thereon for payment of

Gratuity.

Settlement allowance is provided for, under a defined benefit

scheme, to cover the eligible employees, liability being

determined on actuarial valuation.

Pension is provided for under a defined contribution scheme,

contributions are made to the Pension Fund administered

by the Government.

Warranty

Warranty provision for contractual obligations in respect of

machines/ tractors sold is set up based on the past

experience and is provided in the year of sale.

Special Tools

Expenditure on manufactured and bought out special tools

are amortized equally over a five year period or earlier, if

scrapped. Individual items costing less than ` 750/- are

written off fully in the initial year of acquisition / manufacture.

Income Tax

Taxes are determined following the tax effect accounting

method and a provision therefore is recognized. A deferred

tax asset or deferred tax liability is recorded to recognize

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48

the tax effect on timing differences arising on reconciliation

of profit/loss as per financial statements and profit/loss as

per taxation.

Earnings per share

Basic earnings per share is determined by considering the

net profit after tax, inclusive of the post tax effect on

extraordinary items, if any, and the number of shares

outstanding on a weighted average basis.

Government Grants

Government Grants are accounted when there is a

reasonable certainty of their realization. Grants related to

revenue, unless received as compensation for expenses /

losses, are recognized as revenue over the period to which

these are related on the principle of matching costs to

revenue. Grants related to depreciable fixed assets are

adjusted against the gross cost of the relevant assets while

those related to non-depreciable assets are credited to

capital reserve.

Intangible Assets

Intangible assets are capitalized at cost if

(a) It is probable that the future economic benefits that

are attributable to the asset will flow to the

company,

(b) The Company will have control over the assets,

and

(c) the cost of these assets can be measured

realiably.

Technical Know-how

Expenditure on Technical Know-how is recognized as an

Intangible Asset and amortized on straight line method

based on technical assessment for a period not exceeding

ten years. The amortization commences when the asset

is available for use.

Software

The cost of software internally generated / purchased for

internal use which is not an integral part of the related

hardware is recognized as an Intangible Asset and is

amortized on straight line method based on technical

assessment for a period not exceeding ten years.

Research and Development Expenditure

Research Phase:

Expenditure on research including the expenditure during

the research phase of Research & Development Projects

is charged to profit and loss account in the year of

incurrence.

Development Phase:

Expenditure incurred on Development Costs, which relate

to Design, Construction and Testing of a chosen alternative

for new or improved material, devices, products, processes,

systems or services are recognized as an intangible asset.

Such Intangible assets are amortized based on technical

assessment over a period not exceeding ten years using

straight line method.

Impairment of Assets

As at the end of each Balance Sheet date, the carrying

amount of assets is assessed as to whether there is any

indication of impairment. If the estimated recoverable

amount is found less than its carrying amount, the

impairment loss is recognized and assets are written down

to their recoverable amount.

Others

The amount of 50000/- per head received/receivable from

LIC on account of gratuity claims in respect of employees

separated under Voluntary Retirement Scheme during the

year is accounted as Other Income.

In respect of employees who are separated other than under

Voluntary Retirement Scheme, the Gratuity paid in excess

of 50000/-, Earned Leave Encashment (ELE), Settlement

Allowance (SA) is debited to the respective provision

accounts. The provision at the year-end for ELE and SA is

restated as per the actuarial valuation done at the year-

end. In case of ELE and SA, any short or excess provision

is charged as expenditure or treated as provision no longer

required.

Gratuity, Earned Leave encashment, Settlement Allowance

and Lump sum Compensation paid to employees under

Voluntary Retirement Scheme shall be fully written off in

the year of incidence.

Expenses incurred in respect of Bonds issued for raising

funds to meet payments made under the Voluntary

Retirement Scheme are fully written off in the year of

disbursement.

****

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BALANCE SHEET AS AT 31ST MARCH 2015

( ` in lakhs )

Note As at As at

No. 31-03-2015 31-03-2014

I EQUITY AND LIABILITIES

1 SHAREHOLDERS’ FUNDS(a) Share Capital 1 18409.16 142035.01(b) Reserves and Surplus 2 (82374.96) (72571.47)

2 SHARE APPLICATION MONEY PENDING ALLOTMENT 3 - 44374.15

3 NON-CURRENT LIABILITIES(a) Long-term Borrowings 4 5831.30 4847.50(b) Long-term Provisions 5 6317.52 6048.73

4 CURRENT LIABILITIES(a) Short-term Borrowings 6 3456.84 3584.93(b) Trade Payables 7 1996.68 3129.16(c) Other Current Liabilities 8 15954.15 11665.06(d) Short-term Provisions 9 5506.16 3850.74

TOTAL 143096.85 146963.81

II ASSETS

1 NON-CURRENT ASSETS(a) Fixed Assets

(i) Tangible Assets 10 2395.96 2810.92(ii) Intangible Assets 10 - 20.56(iii) Capital Work in Progress 10 4.30 -

(b) Non-current Investments 11 76389.86 76389.86(c) Long Term Loans & Advances 12 349.36 322.61

2 CURRENT ASSETS(a) Inventories 13 3421.45 4343.01(b) Trade Receivables 14 2090.30 3096.26(c) Cash and Cash Equivalents 15 1798.43 4373.51(d) Short-term Loans and Advances 16 55352.53 54517.99(e) Other Current Assets 17 1294.66 1089.09

TOTAL 143096.85 146963.81

Significant Accounting PoliciesSee accompanying notes to the financial statements. 1 to 45The accompanying notes form an integral part of the financial statements

Particulars

For and on behalf of the Board As per our Report attached

For M/s. DOKANIA S KUMAR & CO.

F.R.N. 322919E

Chartered Accountants

S. Girish Kumar P. Sivarami Reddy B. K. Subash CA. Sushil Kumar Dokania

Chairman & Managing Director Director (Operations) Company Secretary Partner

(Membership No.057020)Place: New DelhiDate : June 18, 2015

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STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH 2015

( ` in lakhs )

Note Year ended Year ended

No. 31-03-2015 31-03-2014Particulars

REVENUE

Gross Revenue from Operations 18 6147.40 7970.58

Less: Excise Duty 119.05 126.23

Net Revenue from Operations 6028.35 7844.35

Other Income 19 3246.56 3018.38

Total Revenue 9274.91 10862.73

EXPENSES

Cost of Materials Consumed 20 3232.32 5933.71

Purchase of Stock-in-Trade 21 337.57 385.50

Changes in Inventories of Finished Goods,Stock-in-Process and Stock-in-Trade 22 649.85 (877.32)

Employee Benefits Expense 23 9978.35 9029.89

Finance Costs 24 1835.62 1433.69

Depreciation & Amortisation Expense 25 271.35 340.16

Other Expenses 26 2716.40 11518.93

Less: Jobs done for Internal use 27 (91.69) (91.85)

Total Expenses 18929.77 27672.71

Profit / (Loss) Before Exceptional and Extrordinary items and Tax (9654.86) (16809.98)

Add : Exceptional Items 28 - 27500.23

Less : Prior Period Adjustments 29 1.80 108.21

Profit / (Loss) Before Tax (9656.66) 10582.04

Tax Expense - 1861.45

Profit / (Loss) for the Period (9656.66) 8720.59

Earnings Per Equity Share: 33

Equity Share of Nominal Value 10/- each

Before Exceptional Items

Basic & Diluted (In `) - (2.21)

After Exceptional Items

Basic & Diluted (In `) - 1.39

After Tax

Basic & Diluted (In `) (0.83) 1.15

Number of Shares in computing Earnings Per Share 1160325355 760350140

Significant Accounting PoliciesSee accompanying notes to the financial statements. 1 to 45The accompanying notes form an integral part of the financial statements

For and on behalf of the Board As per our Report attached

For M/s. DOKANIA S KUMAR & CO.

F.R.N. 322919E

Chartered Accountants

S. Girish Kumar P. Sivarami Reddy B. K. Subash CA. Sushil Kumar Dokania

Chairman & Managing Director Director (Operations) Company Secretary Partner

(Membership No.057020)Place: New DelhiDate : June 18, 2015

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NOTES FORMING PART OF BALANCE SHEET

NoteParticulars

As at As at

No 31-03-2015 31-03-2014

( ` in lakhs )

1 SHARE CAPITAL

AUTHORISED SHARE CAPITAL :

123,00,00,000 (Previous year 123,00,00,000) Equity Shares of ` 10/- each 123000.00 123000.00

8,70,00,000 (Previous year 8,70,00,000) Preference Shares of ` 100/- each 87000.00 87000.00

210000.00 210000.00

ISSUED, SUBSCRIBED & PAID UP

120,40,91,640 (Previous year 76,03,50,140)Equity Shares of `10/- each 120409.16 76035.01

4,43,00,000 (Previous year 4,43,00,000) 3.5% Redeemable Preference

Shares of `100/- each 44300.00 44300.00

2,17,00,000 (previous year 2,17,00,000) 8% Redeemable Preference

Shares of ` 100/- each

21700.00 21700.00

186409.16 142035.01

1.A During the year, 44,37,41,500 Equity Shares were allotted to the President of India on Conversion of Government of

India Loans (Long Term & Current maturity). However, the Shares have not been issued pending in-principle approval

from the National Stock Exchange.

1.B Out of the issued, subscribed & paid-up Equity shares, 3,18,85,900 (Previous year 3,18,85,900) shares are alloted as

fully paid up for consideration other than cash.

1.C The details of Shareholders holding more than 5% Shares.

As at 31-3-2015 As at 31-03-2014Name of the Shareholders

No. of Shares % held No. of Shares % held

Equity Shares:

Hon’ble President of India 1128056626 93.69 684315126 90

3.5% Redeemable Prefernce Shares

Hon’ble President of India 44300000 100 44300000 100

8% Redeemable Prefernce Shares

Hon’ble President of India 21700000 100 21700000 100

1.D The reconciliation of the number of shares outstanding is set out below :

Particulars As at As at

31-03-2015 31-03-2014

No. of Shares No. of Shares

Equity Shares:

Shares at the beginning of the year 760350140 760350140

Add: Shares Issued on account of Conversion of Loan from Govt of India 443741500 -

Shares at the end of the year 1204091640 760350140

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NOTES FORMING PART OF BALANCE SHEET

NoteParticulars

As at As at

No 31-03-2015 31-03-2014

3.5% Redeemable Preference Shares

Shares at the beginning of the year 44300000 -

Add: Shares Issued under Revival Plan of

HMT Machine Tools Ltd, a Subsidiary - 44300000

Shares at the end of the year 44300000 44300000

8% Redeemable Preference Shares

Shares at the beginning of the year 21700000 -

Add: Shares Issued during in the year - 21700000

Shares at the end of the year 21700000 21700000

2 RESERVES AND SURPLUS

General Reserve

Opening Balance as per last Balance Sheet 13453.11 13453.11

Balance in Statement of Profit & Loss

Opening Balance as per last Balance Sheet (86024.58) (94745.17)

Add: Adjustments relating to Fixed Assets (Refer Note No. 10) (146.83) -

Add: Profit/(Loss) for the year (9656.66) 8720.59

Net Surplus/(Deficit) in the Statement of Profit & Loss (95828.07) (86024.58)

TOTAL (82374.96) (72571.47)

3 SHARE APPLICATION MONEY PENDING ALLOTMENT

Towards Conversion of GOI Loans into Equity Share Capital under

Revival Plan of HMT Limited, approved by Govt. of India. (Share Deposit) - 44374.15

- 44374.15

4 LONG TERM BORROWINGS

SECURED - -

UNSECURED

Loans from Government of India with interest @ 7% to 15.5%,

repayable in 1-5 equal annual installments from the date of drawal of loan 4844.80 3861.00

Amount of continuing default ‘ Nil (Previous year ‘ Nil)

Loans from Dena Bank with interest @ 11.5% p.a upto 31.5.2013

and 15% p.a. till the the date of settlement

Amount of continuing default ‘ Nil (Previous year ‘ Nil) 986.50 986.50

TOTAL 5831.30 4847.50

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NOTES FORMING PART OF BALANCE SHEET

NoteParticulars

As at As at

No 31-03-2015 31-03-2014

5 LONG TERM PROVISIONS

Provision for Employee Benefits:

Gratuity 5358.24 5190.04

Earned Leave Encashment 667.32 587.44

Settlement Allowance 291.96 271.25

TOTAL 6317.52 6048.73

6 SHORT TERM BORROWINGS

SECURED

Cash Credits 3026.84 3154.93

UNSECURED

Loans from a Subsidiary 430.00 430.00

TOTAL 3456.84 3584.93

Cash Credits as referred to above, are repayable on demand and are secured by hypothecation of entire current

assets of the Company including inventories and Trade Receivables, by first charge and collateral security by

way of equitable mortgage by deposit of title deed of the immovable property of the Company ranking pari passu

inter-se the participating banks. (Amount of contnuing default Nil (Previous year 330.39 lakhs)

7 TRADE PAYABLES

Acceptances - 115.90

Dues towards Goods purchased 1188.49 2616.52

Dues to Micro, Small & Medium Enterprises 808.19 396.74

TOTAL 1996.68 3129.16

7.A The details of amounts outstanding to Micro, Small and Medium Enterprises based on information

available with the Company is as under:

Principal amount due and remaining unpaid 808.19 396.74

Interest due on above and the unpaid interest 532.76 348.58

Interest remaining due and payable in the succeeding year until

the dues are actually paid 0.69 0.60

Interest paid - -

7.B Interest accrued and remaining unpaid at the end of the accounting year. 532.76 348.58

2014-15 184.18 -

2013-14 45.05 45.05

2012-13 83.43 83.43

2011-12 72.58 72.58

2010-11 60.40 60.40

2009-10 55.24 55.24

2008-09 31.24 31.24

2007-08 0.64 0.64

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NOTES FORMING PART OF BALANCE SHEET

NoteParticulars

As at As at

No 31-03-2015 31-03-2014

8 OTHER CURRENT LIABILITIES

Current maturities of Long-Term Debt

Loans from Government of India 2357.20 1395.00

Interest accrued and due on borrowings

Government of India Loan 634.52 -

Loan from Bank 1566.08 1418.10

Interest accrued but not due on borrowings

Government of India Loan 233.32 144.64

Dues to Subsidiary companies

HMT Chinar Watches Ltd - 0.09

HMT (International) Ltd 17.08 -

Others

Advance received against sales 476.46 393.61

Sundry Creditors - other dues 4209.01 3906.52

Other liabilities 6460.48 4407.10

TOTAL 15954.15 11665.06

9 SHORT TERM PROVISIONS

Provision for Employee Benefits

Gratuity 1499.10 -

Leave Encashment 322.18 167.13

Settlement Allowance 76.49 46.76

1897.77 213.89

Provision for Income Tax 1861.45 1861.45

Provision for Contingencies 315.60 320.60

Provision for Warranty 15.31 32.61

Other Provisions* 1416.03 1422.19

TOTAL 5506.16 3850.74

* Other Provisions include Provision towards 1992 Wage and Salary Revision.

Page 61: HMT Ltd (CRD)(050915) · No. 4 of the accompanying Notice dated September 3, 2015. ITEM NO - 4 Shri Vishvajit Sahay (DIN. 06840620), was appointed as Government Nominee Director of

ANNUAL REPORT 2014-201512345678901234567890123456789012123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012

55

(`

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cia

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n

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et

Blo

ck

Bal

ance

Add

ition

sD

educ

tions

/B

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ceB

alan

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epre

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ion

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ance

Bal

ance

Bal

ance

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ticul

ars

as a

tA

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at

as a

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ar

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14

ITa

ng

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ets

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ned

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ets:

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& L

and

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elop

men

t

1

80.8

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-

Page 62: HMT Ltd (CRD)(050915) · No. 4 of the accompanying Notice dated September 3, 2015. ITEM NO - 4 Shri Vishvajit Sahay (DIN. 06840620), was appointed as Government Nominee Director of

ANNUAL REPORT 2014-201512345678901234567890123456789012123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012

56

Note

:

(a)

Qu

an

tum

of lo

ss d

ue

to

Im

pa

irm

en

t o

f Asse

ts a

s p

er A

S-2

8 -

Nil

(b)

Ca

pita

l Wo

rk-i

n-P

rog

ress in

clu

de

s M

ach

ine

ry &

Eq

uip

me

nt w

hic

h a

re in

Tra

nsit a

nd

un

de

r In

sp

ectio

n o

r E

rectio

n.

(c)

Pu

rsu

an

t to

en

actm

en

t o

f th

e C

om

pa

nie

s A

ct,

20

13

, th

e c

om

pa

ny h

as a

pp

lied

th

e e

stim

ate

d u

se

ful liv

es a

s s

pe

cifie

d in

Sch

ed

ule

II.

Acco

rdin

gly

, th

e u

na

mo

rtis

ed

ca

rryin

g a

mo

un

t is

be

ing

de

pre

cia

ted

ove

r th

e r

em

ain

ing

use

ful liv

es. T

he

wri

tte

n d

ow

n v

alu

e o

f F

ixe

d

Asse

ts w

ho

se

liv

es w

ere

exp

ire

d a

s a

t 1

st A

pri

l, 2

01

4 h

ave

be

en

ad

juste

d,

in t

he

op

en

ing

ba

lan

ce

of

Sta

tem

en

t o

f P

rofit

an

d L

oss

Acco

un

t o

f `

14

6.8

3 L

akh

s. T

he

De

pre

cia

tio

n fo

r th

e y

ea

r is

low

er

by `

12

.67

lakh

s.

LA

ND

1T

he

Co

mpa

ny is

in p

osse

ssio

n o

f g

ift la

nd

loca

ted

at P

injo

re, K

ala

ma

sse

ry a

nd

Hyd

era

ba

d g

ifte

d b

y th

e re

sp

ective

Sta

te G

ove

rnm

en

ts

ad

me

asu

rin

g 8

22

.67

acre

s, 3

0 a

cre

s a

nd

66

0.7

5 a

cre

s r

esp

ective

ly, n

om

ina

lly v

alu

ed

at

1/-

ea

ch

. T

he

mu

tatio

n o

f T

itle

of la

nd

in th

e

na

me

of th

e C

om

pa

ny is

ye

t to

be

do

ne

.

2T

he C

om

pany is

in p

ossessio

n o

f le

asehold

land m

easuring 3

0 a

cre

s a

t A

ura

ngabad o

ut of w

hic

h 5

acre

s o

f la

nd h

as b

een e

ncro

ached

up

on

. F

urt

he

r, le

ga

l actio

n is

be

ing

pu

rsu

ed

fo

r re

sto

ratio

n o

f th

e e

ncro

ach

ed

lan

d.

3In

re

sp

ect

of

lan

ds a

t H

yd

era

ba

d,

an

are

a a

dm

ea

su

rin

g 2

8.4

0 a

cre

s w

as le

ase

d t

o v

ari

ou

s G

ove

rnm

en

t D

ep

art

me

nts

at

Hyd

era

ba

d.

Pe

nd

ing

re

gis

tra

tio

n o

f tr

an

sfe

r, th

e C

om

pa

ny h

as a

gre

ed

to

re

lea

se

14

.20

acre

s o

f la

nd

in e

xch

an

ge

fo

r 1

4.2

0 a

cre

s o

f la

nd

un

de

r a

n

exch

an

ge

ag

ree

me

nt w

ith

a S

tate

Pu

blic

Se

cto

r U

nd

ert

akin

g. T

he

Co

mpa

ny h

as a

lso

le

ase

d 1

00

0 s

q. ya

rds o

f la

nd

, fo

r w

hic

h le

ase

de

ed

wa

s e

xe

cu

ted

an

d a

gre

ed

to

re

lea

se

an

oth

er

two

acre

s o

f la

nd

to

AP

Po

sta

l De

pa

rtm

en

t in

Hyd

era

ba

d, th

e e

xe

cu

tio

n o

f w

hic

h is

pendin

g. T

he C

om

pany h

as o

bta

ined s

tay fro

m the A

ndhra

Pra

desh H

igh C

ourt

, again

st re

possessio

n o

f 106 a

cre

s a

nd 3

5 g

unta

s o

f land

by th

e G

ove

rnm

en

t o

f A

nd

hra

Pra

de

sh

. N

o fin

alit

y h

as b

ee

n r

ea

ch

ed

on

th

e p

rop

osa

l fo

r su

rre

nd

er

of 3

00

acre

s o

f la

nd

ow

ne

d b

y th

e

Com

pany a

t H

ydera

bad, to

the G

overn

ment of A

ndhra

Pra

desh, in

lieu o

f paym

ent of part

sale

consid

era

tion a

nd is

sue o

f m

ark

eta

ble

title

for th

e b

ala

nce la

nd.

4In

re

sp

ect o

f la

nd

s a

t P

injo

re, H

ary

an

a, th

e H

ary

an

a S

tate

Go

ve

rnm

en

t h

as issu

ed

an

ord

er

for

resu

mp

tio

n o

f 4

46

acre

s o

f u

nu

tilis

ed

lan

d, a

ga

inst w

hic

h th

e C

om

pa

ny h

as o

bta

ine

d a

sta

y fro

m th

e H

igh

Co

urt

of P

un

jab

& H

ary

an

a a

ga

inst th

e s

aid

re

su

mp

tio

n o

rde

r a

nd

the s

am

e is

continuin

g. T

he C

om

pany h

as a

gre

ed a

nd tra

nsfe

rred a

bout 5 a

cre

s o

f la

nd to H

ary

ana Irr

igation D

epart

ment at th

eir request

for co

nstr

uctio

n o

f K

au

sh

aly

a D

am

an

d c

om

pe

nsa

tio

n fo

r th

e s

am

e is

ye

t to

be

re

co

ve

red

on

acco

un

t o

f p

en

din

g m

uta

tio

n o

f title

of la

nd

in C

om

pa

ny’s

na

me

, w

hic

h

is a

su

bje

ct

ma

tte

r o

f le

ga

l p

roce

ed

ing

s

be

fore

th

e P

un

jab

& H

ary

an

a H

igh

Co

urt

. F

urt

he

r, N

atio

na

l

Hig

hw

ays A

uth

ori

ty o

f In

dia

ha

s a

cq

uir

ed

ab

ou

t 11

.73

acre

s o

f la

nd

fo

r ro

ad

wid

en

ing

pro

ject a

nd

co

mp

en

sa

tio

n fo

r th

e a

cq

uir

ed

lan

d is

aw

aite

d a

s th

e m

att

er re

ga

rdin

g m

uta

tio

n o

f title

of la

nd

in C

om

pa

ny’s

na

me

is p

en

din

g b

efo

re th

e P

un

jab

& H

ary

an

a H

igh

Co

urt

.

OT

HE

RS

5In

Tra

cto

r D

ivis

ion

-Pin

jore

: A T

ran

sp

ort

Ve

hic

le w

ith

WD

V o

f `

1/-

wa

s lo

st d

ue

to

th

eft a

nd

is to

be

wri

tte

n o

ff. F

acto

ry E

qu

ipm

en

t w

ith

WD

V `

4/-

, O

ffic

e E

qu

ipm

en

t w

ith

WD

V o

f `

3/-

, E

lectr

ica

l E

qu

ipm

en

t w

ith

WD

V `

13

/-,

Fu

rnitu

re a

nd

Fix

ture

s w

ith

WD

V `

19

/-,

Co

mp

ute

r &

Da

ta P

roce

ssin

g E

qu

ipm

en

t w

ith

WD

V

6/-

we

re b

urn

t d

uri

ng

fir

e in

sto

re a

nd

be

wri

tte

n o

ff.

Page 63: HMT Ltd (CRD)(050915) · No. 4 of the accompanying Notice dated September 3, 2015. ITEM NO - 4 Shri Vishvajit Sahay (DIN. 06840620), was appointed as Government Nominee Director of

ANNUAL REPORT 2014-201512345678901234567890123456789012123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012

57

NOTES FORMING PART OF BALANCE SHEET

NoteParticulars

As at As at

No 31-03-2015 31-03-2014

( ` in lakhs )

11 NON CURRENT INVESTMENTS

Long Term Investments (Unquoted) - Valued At Cost less Permanent

Diminuition in Value of Investments

TRADE INVESTMENTS - -

IN EQUITY SHARES

30,00,000 (Previous year 30,00,000) Ordinary Shares of Naira 1/- each 171.55 171.55

fully paid up in Nigeria Machine Tools Ltd, Nigeria.

20,84,050 (Previous year 20,84,050) Equity Shares of `1/- each fully 20.84 20.84

paid up in Gujarat State Machine Tools Corporation Ltd., Bhavnagar.

1,60,800 (Previous year 1,60,800) Equity Shares of ` 10/- each fully 16.08 16.08

paid up in Andhra Pradesh Gas Power Corporation Limited, Hyderabad.

In Equity Shares of Joint Venture

1,50,000 (Previous year 1,50,000) Equity Shares of 10/- each fully 15.00 15.00

paid up in Sudmo HMT Process Engineers (India) Ltd., Bangalore.

In Equity Shares of Subsidiaries

7,20,000 (Previous year 7,20,000) Equity Shares [ including 6,90,000 3.00 3.00

(Previous year 6,90,000) Bonus Shares] of 10/- each fully paid up in HMT

(International) Ltd, Bangalore

3,74,68,586 (Previous year 3,74,68,586) Equity Shares of 10/- each fully 3746.86 3746.86

paid up in HMT Bearings Ltd., Hyderabad

27,65,99,137 (Previous year 27,65,99,137) Equity Shares of 10/- each 27659.91 27659.91

fully paid up in HMT Machine Tools Ltd, Bangalore

64,90,100 (Previous year 64,90,100) Equity Shares of 10/- each fully 649.01 649.01

paid up in HMT Watches Ltd., Bangalore (Wholly owned Subsidiary Company).

16,60,100 (Previous year 16,60,100) Equity Shares of 10/- each fully paid up 166.01 166.01

in HMT Chinar Watches Ltd., Jammu (Wholly owned Subsidiary Company).

In Preference Shares of Subsidiaries

4,43,00,000 (Previous year 4,43,00,000) 3.5% Redeemable Preference 44300.00 44300.00

Shares of 100/- each fully paid up in HMT Machine Tools Ltd, Bangalore

(Wholly owned Subsidiary Company).

76748.26 76748.26

Less: Provision for dimunition in value of Investment

Nigeria Machine Tools Ltd., Nigeria 171.55 171.55

Gujarat State Machine Tools Corporation Ltd, Bhavnagar 20.84 20.84HMT Chinar Watches Ltd. Jammu 166.01 166.01

358.40 358.40

Total Non Current Investments 76389.86 76389.86

Aggregate amount of Unquoted Investments 76389.86 76389.86

Page 64: HMT Ltd (CRD)(050915) · No. 4 of the accompanying Notice dated September 3, 2015. ITEM NO - 4 Shri Vishvajit Sahay (DIN. 06840620), was appointed as Government Nominee Director of

ANNUAL REPORT 2014-201512345678901234567890123456789012123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012

58

NOTES FORMING PART OF BALANCE SHEET

NoteParticulars

As at As at

No 31-03-2015 31-03-2014

11.A HMT Machine Tools Ltd, Bangalore is a BIFR referred Company, and have sought for exemption from payment

of Stamp Duty from the State Government, pending receipt of order from the State Government , the Share

Certificates for 3.5% Preference Shares are not yet issued to HMT Ltd.

12 LONG TERM LOANS AND ADVANCES

Unsecured, Considered Good 349.36 322.61

Capital Advance - -

349.36 322.61

13 INVENTORIES*

Raw Materials and components 895.43 1170.51

Material and components in transit 0.06 18.32

Work-in-progress 1354.94 1818.88

Finished goods # 877.90 1101.88

Stock in Trade 427.10 382.14

Stores and spares 52.67 68.48

Tools and instruments 281.79 289.27

Scrap 24.85 31.74

3914.74 4881.22

Less: Provision for Non-moving Inventories 493.29 538.21

3421.45 4343.01

* Includes stock with C&F Agents / Contractors / Ancillary units /

Customs / in Bonds / at site - 8.56

# Includes Excise Duty paid/payable 8.67 10.65

14 TRADE RECEIVABLES*

UNSECURED

Trade receivables outstanding for a period exceeding six months

from the date they are due for payment:

- Considered good 1988.66 2234.26

- Considered doubtful 4458.77 4353

6447.43 6587.59

Less: Provision for doubtful debts 4458.77 4353.33

1988.66 2234.26

Others

Considered good 101.64 862.00

2090.30 3096.26

*Debts due by firms or Private Companies in which any Director, - -

Officer is a Partner or a Director or a Member

Page 65: HMT Ltd (CRD)(050915) · No. 4 of the accompanying Notice dated September 3, 2015. ITEM NO - 4 Shri Vishvajit Sahay (DIN. 06840620), was appointed as Government Nominee Director of

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59

16 SHORT TERM LOANS AND ADVANCES*

UNSECURED

Loans to Subsidiary Companies

Considered Good

HMT Machine Tools Ltd 1148.68 1115.41

HMT Watches Ltd 49416.41 48161.62

Considered Doubtful

HMT Chinar Watches Ltd 8265.82 8108.91

58830.91 57385.94

Less:Provision for doubtful loans 8265.82 8108.91

Sub-Total 50565.09 49277.03

Advances to Subsidiary Companies

Considered Good

HMT Machine Tools Ltd 401.47 575.63

HMT Watches Ltd 2403.87 2368.53

HMT Chinar Watches Ltd 0.22 -

HMT Bearings Ltd 80.30 89.36

HMT (International) Ltd - 34.06

Sub-Total 2885.86 3067.58

Advances Recoverable In Cash Or In Kind Or For Value to be received:

Secured

Considered Good 0.47 0.46

Unsecured

Considered Good # 1740.68 1996.07

Considered Doubtful 113.13 113.38

1853.81 2109.45

Less:Provision for Doubtful Advances 113.13 113.38

Sub-Total 1740.68 1996.07

NOTES FORMING PART OF BALANCE SHEET

NoteParticulars

As at As at

No 31-03-2015 31-03-2014

( ` in lakhs )

15 CASH AND CASH EQUIVALENTS

Cash and Cheques on hand 3.34 3.57

Balance with Banks in Current account 137.04 2793.50

Balance with Banks in Deposit account* 1658.05 1576.44

1798.43 4373.51

* Deposits with Maturity Period Less than 3 Months as on 31st March 158.46 -

* Deposits with Maturity Period More than 3 Months and Less than 12 Months 1499.59 1576.44

Page 66: HMT Ltd (CRD)(050915) · No. 4 of the accompanying Notice dated September 3, 2015. ITEM NO - 4 Shri Vishvajit Sahay (DIN. 06840620), was appointed as Government Nominee Director of

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60

NOTES FORMING PART OF BALANCE SHEET

NoteParticulars

As at As at

No 31-03-2015 31-03-2014

( ` in lakhs )

Other Advances

Unsecured

Considered Good

Balance with Collectors of Customs, Central Excise, etc., 2.71 5.90

Deposits 121.20 150.06

TDS Receivable 36.52 20.89

Sub-Total 160.43 176.85

TOTAL 55352.53 54517.99

*Debts due by firms or Private Companies in which any Director,

Officer is a Partner or a Director or a Member - -

# Includes advances to suppliers, prepaid expenses, MODVAT Credit to be availed, etc.

17 OTHER CURRENT ASSETS

Special Tools 81.18 85.17

Interest on Trade Receivable 5970.24 6190.76

Less: Provision for interest on Trade Receivable 4756.76 5186.84

1213.48 1003.92

TOTAL 1294.66 1089.09

18 GROSS REVENUE FROM OPERATIONS

Sale of Products *

Tractors 4832.84 6241.07

Food Processing Machinery 487.52 738.00

Accessories 176.32 169.73

Sale of Services

Sundry Jobs and Miscellaneous Sales 643.13 813.37

Packing / Forwarding charges 7.59 8.41

TOTAL 6147.40 7970.58

* Nett of Trade Discount

Page 67: HMT Ltd (CRD)(050915) · No. 4 of the accompanying Notice dated September 3, 2015. ITEM NO - 4 Shri Vishvajit Sahay (DIN. 06840620), was appointed as Government Nominee Director of

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61

NOTES FORMING PART OF STATEMENT OF PROFIT AND LOSS

NoteParticulars

Year ended Year ended

No 31-03-2015 31-03-2014

19 OTHER INCOME

Servicing Income 7.92 4.41

Recoveries from Staff/Others 146.84 133.58

Royalties from Subsidiaries 7.95 2.25

Rent Received 501.28 437.25

Profit on Sale of Assets 11.99 0.02

Interest Income

On Bank Deposits 117.13 159.93

Interest from subsidiaries on HC Loans 1463.96 1463.96

Interest from Dealers/Others 127.29 271.53

Dividend from Subsidiaries 7.20 14.40

Provisions no longer required withdrawn 628.12 165.35

Grant received from GOI - 17.09

Other Non Operating Income* 226.88 348.61

TOTAL 3246.56 3018.38

* Includes Training Expenses recovered, disposal of Scrap, Freight & Insurance Recoveries

20 COST OF MATERIALS CONSUMED

Raw materials and Components

Opening Stock 1170.51 976.73

Purchases 2957.24 6127.49

4127.75 7104.22

Less: Closing Stock 895.43 1170.51

Cost of Materials Consumed 3232.32 5933.71

20.A PARTICULARS OF MATERIALS CONSUMED:

Steel 194.82 100.90

Non-ferrous Metals 2.11 6.04

Ferrous Castings 341.76 518.50

Non-ferrous Castings 3.03 15.92

Forgings 307.48 499.12

Standard parts 108.80 374.80

Components 2274.32 4414.16

Others - 4.27

TOTAL 3232.32 5933.71

( ` in lakhs )( ` in lakhs )

Page 68: HMT Ltd (CRD)(050915) · No. 4 of the accompanying Notice dated September 3, 2015. ITEM NO - 4 Shri Vishvajit Sahay (DIN. 06840620), was appointed as Government Nominee Director of

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62

NOTES FORMING PART OF STATEMENT OF PROFIT AND LOSS

NoteParticulars

Year ended Year ended

No 31-03-2015 31-03-2014

( ` in lakhs )

21 PURCHASES OF STOCK IN TRADE

Purchases of Tractor Spares 337.57 385.50

337.57 385.50

22 CHANGES IN INVENTORIES OF FINISHED GOODS,

STOCK IN PROCESS & STOCK IN TRADE

Finished Goods

Closing Balance 877.90 1101.88

Opening Balance 1101.88 916.65

223.98 (185.23)

Scrap

Closing Balance 24.85 31.74

Opening Balance 31.74 21.76

6.89 (9.98)

Work in Progress

Closing Balance 1354.94 1818.88

Opening Balance 1818.88 1133.34

463.94 (685.54)

Stock in Trade

Closing Balance 427.10 382.14

Opening Balance 382.14 385.57

(44.96) 3.43

TOTAL 649.85 (877.32)

Details of Work-in-Progress

Tractors & its parts 1271.52 1689.94

Food Processing Machines 83.42 128.94

1354.94 1818.88

23 EMPLOYEE BENEFIT EXPENSES *

Salaries,Wages and Bonus 6474.64 6045.44

House Rent Allowance 216.19 205.34

Gratuity 1748.21 1315.07

Contribution to PF & FPS 728.45 669.87

Deposit Linked Insurance 17.32 11.13

Contribution to ESI 0.60 0.94

Welfare Expenses 792.94 782.10

9978.35 9029.89

Page 69: HMT Ltd (CRD)(050915) · No. 4 of the accompanying Notice dated September 3, 2015. ITEM NO - 4 Shri Vishvajit Sahay (DIN. 06840620), was appointed as Government Nominee Director of

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63

NOTES FORMING PART OF STATEMENT OF PROFIT AND LOSS

NoteParticulars

Year ended Year ended

No 31-03-2015 31-03-2014

( ` in lakhs )

* Includes

- Wages for repairs to machinery 303.29 266.14

- Payments relating to Directors (including Chairman & Managing Director)

Salaries 2.31 17.47

Provident Fund 0.21 1.44

Gratuity 0.50 2.92

Medical - 0.61

24 FINANCE COSTS

Interest Expense

Government of India Loans 723.20 144.64

Cash Credit loans from Banks 415.28 402.09

Loans from Bank 147.98 -

HMT Bonds - 316.40

Inter Corporate Loan 43.00 43.00

Short Term Loan from Bank - 167.88

Others 473.80 297.11

Other Borrowing Cost

Finance Charges 19.55 14.42

Bank / Discounting Charges 12.81 48.15

1835.62 1433.69

25 DEPRECIATION AND AMORTISATION EXPENSE

Depreciation 271.35 337.40

Amortisation of Intangible Assets - 2.76

271.35 340.16

26 OTHER EXPENSES

Manufacturing Expenses

Consumption of Stores,Spares,Tools & Pkg.Matls.* 235.50 380.41

Power and Fuel 348.94 477.78

Excise Duty 1.88 2.34

Repairs to machinery 8.80 16.46

Amortisation of Special Tools 95.69 102.96

Provision for Non Moving Inventories 11.34 49.10

Selling & Distribution Expenses

Rebate on Sales 144.45 129.85

Advertisement and Publicity 32.47 34.91

Carriage outwards 162.94 194.12

Establishment Expenses

Rent 27.49 29.63

Rates and Taxes 174.17 230.61

Insurance 24.83 23.61

( ` in lakhs )

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64

NOTES FORMING PART OF STATEMENT OF PROFIT AND LOSS

NoteParticulars

Year ended Year ended

No 31-03-2015 31-03-2014

Water and Electricity 364.12 368.12

Repairs to building 5.82 19.40

Printing and Stationery 18.57 21.94

Auditors Remuneration # 3.11 4.45

Provision for loss in value of investment - 166.01

Provision for Doubtful Debts,Loans and Advances 368.60 8544.51

Warranty claims 28.30 46.90

Loss sustained by PF Trust 4.71 1.50

Bad Debts / Advances written off 346.90 236.78

Travelling Expenses 108.32 113.45

Other Expenses 538.57 532.05

Less: Recovery of Common Expenses from Subsidiary Companies (339.12) (207.96)

2716.40 11518.93

* Includes Stores and Spare parts for:

Repairs to Machinery 0.23 2.60

# As Auditor 2.20 2.20

For taxation matters 0.29 0.29

For other services 0.15 0.23

Reimbursement of expenses 0.37 1.12

Service tax 0.10 0.18

Cost Audit Fee & expenses - 0.43

3.11 4.45

27 JOBS DONE FOR INTERNAL USE

Shop manufactured Special Tools (91.69) (91.85)

(91.69) (91.85)

28 EXCEPTIONAL ITEMS

Income

Interest Waiver on GOI Loans upto 31.3.2012 - 20187.24

Withdrawal of Interest on GOI Loans 2012-13 - 8554.14

Interest Waivers under One Time Settlement - 975.40

Guarantee Fee Waiver - 375.92

- 30092.70

Less: Expenses

Reversal of Income on land sale reversal - 986.41

Interest on Loan from Bank - 1418.10

Guarantee fee expenses - 187.96

- 2592.47

Total - 27500.23

Page 71: HMT Ltd (CRD)(050915) · No. 4 of the accompanying Notice dated September 3, 2015. ITEM NO - 4 Shri Vishvajit Sahay (DIN. 06840620), was appointed as Government Nominee Director of

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65

29 PRIOR PERIOD ADJUSTMENTS

Materials - 0.18

Employee Benefit expenses - 3.41

Other Expenses 2.74 104.62

2.74 108.21

Less:

Other Income 0.94 -

1.80 108.21

30 VALUE OF IMPORTS ON CIF BASIS WITH RESPECT TO:

Raw Materials - -

Components and Spare Parts 31.32 5.24

Capital Goods - -

31 EXPENDITURE IN FOREIGN CURRENCY :

Royalty, Know how - -

Professional and Consultation Fees - -

Interest - -

Other Matters - -

32 EARNINGS IN FOREIGN CURRENCY

Sale of Dairy Machinery 4.75 53.24

33 EARNINGS PER SHARE

i) Net Profit/(Loss) after Tax as per Statement of

Profit and Loss attributable to Equity Shareholders (‘ in lakhs) (9656.66) 8720.59

ii) Weighted Average number of Equity Shares used as denominator

for calculating EPS 1160325355 760350140

iii) Basic and Diluted Earnings per Share (Rs.) (0.83) 1.15

iv) Face Value per Equity Share (`) 10 10

34 CONSUMPTION OF RAW MATERIALS, COMPONENTS, STORES & SPARE PARTS:

Imported ` in lakhs 8.82 61.02

% 0.25 0.97

Indigenous ` in lakhs 3459.00 6253.10

% 99.75 99.03

35 The Company is carrying on the business of manufacturing and selling Tractors and Food Processing Machines.

The Segment Reporting as per AS-17 is not applicable to HMT Limited, as the transactions of Food Processing

Machinery is less than 10% of Total Business.

NOTES FORMING PART OF STATEMENT OF PROFIT AND LOSS

NoteParticulars

Year ended Year ended

No 31-03-2015 31-03-2014

( ` in lakhs )

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66

36 FUNCTIONAL DISCLOSURE OF THE STATEMENT OF PROFIT & LOSS

Particulars

Revenue From Operations 6,028.35 7,844.35

Less: Cost of Materials Consumed 3,232.32 5,933.71

Less: Purchase of Stock-In-Trade 337.57 385.50

Less: Changes in Inventories of Finished Goods, Stock-in-Process &

Stock-in-Trade 649.85 (877.32)

Less: Manufacturing Expenses 702.15 1,029.05

Gross Profit 1,106.46 1,373.41

Less: Selling & Distribution Expenses 339.86 358.88

Less: Establishment Expenses 1,674.39 10,131.00

Add: Jobs done for Internal use 91.69 91.85

Operating Profit before Depreciation, Interest & Tax (816.10) (9,024.62)

Less: Depreciation & Amortization Expense 271.35 340.16

Operating Profit before Interest & Tax (1,087.45) (9,364.78)

Less: Finance Costs 1,835.62 1,433.69

Less: Employment Expenses 9,978.35 9,029.89

Operating Profit before Tax & Exceptional Items (12,901.42) (19,828.36)

Add: Other Income 3,246.56 3,018.38

Profit before Tax & Exceptional Items & Prior period adjustments (9,654.86) (16,809.98)

Less: Exceptional Items & Prior period adjustments 1.80 (27,392.02)

Profit before Tax (9,656.66) 10,582.04

Less: Current Tax Expense - 1,861.45

Profit After Tax (9,656.66) 8,720.59

NOTES FORMING PART OF STATEMENT OF PROFIT AND LOSS

NoteParticulars

Year ended Year ended

No 31-03-2015 31-03-2014

( ` in lakhs )

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67

NOTES FORMING PART OF BALANCE SHEET

NoteParticulars

As at As at

No 31-03-2015 31-03-2014

( ` in lakhs )

37 DISCLOSURE REGARDING PROVISIONS:

Provision in respect of present obligations arising out of past events are made in the Accounts based on reasonable

estimates of the obligations. Provision for Warranty is made as per the Accounting Policy.

The details of provision for Warranty claims are furnished below:

(` in Lakhs)

Opening Balance as on 1.4.2014 32.61

Additions during 2014-15 3.12

Total 35.73

Less: Used during 2014-15

Utilised 5.59

Withdrawn 14.83 20.42

Closing Balance as on 31.3.2015 15.31

38 RELATED PARTY TRANSACTIONS & DISCLOSURE U/S 186 OF THE COMPANIES ACT, 2013

Sr. No. Name of Related Party Relationship

1 HMT Machine Tools Ltd, Bangalore (MTL) Subsidiary

2 HMT Watches Ltd, Bangalore (HWL) Subsidiary

3 HMT Chinar Watches Ltd, Jammu (CWL) Subsidiary

4 HMT (International) Ltd, Bangalore (HMT(I) Subsidiary

5 HMT Bearings Ltd, Hyderabad (BLH) Subsidiary

6 SUDMO HMT Process Engineers (India) Ltd, Bangalore Joint Venture

7 Mr. S. Girish Kumar Key Managerial Personnel

8 Mr. P. Sivarami Reddy Key Managerial Personnel

9 Mr. B.K. Subash Key Managerial Personnel

10 Mr. Antony Chacko Ex-Key Managerial Personnel

Page 74: HMT Ltd (CRD)(050915) · No. 4 of the accompanying Notice dated September 3, 2015. ITEM NO - 4 Shri Vishvajit Sahay (DIN. 06840620), was appointed as Government Nominee Director of

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Page 75: HMT Ltd (CRD)(050915) · No. 4 of the accompanying Notice dated September 3, 2015. ITEM NO - 4 Shri Vishvajit Sahay (DIN. 06840620), was appointed as Government Nominee Director of

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69

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70

NOTES FORMING PART OF BALANCE SHEET

NoteParticulars

As at As at

No 31-03-2015 31-03-2014

( ` in lakhs )

39 CONTINGENT LIABILITIES:

The Company is contingently liable for:

39.A Claims against the Company not acknowledged as debts

I . Tax related claims pending in appeal

i) Excise Duty 2.48 2.48

ii) Sales Tax 217.50 217.50

I I . Non receipt of related Forms against levy of

concessional Sales Tax 629.54 940.93

I I I . Employee related claims relating to Lockouts,

Back wages, Incentive & Annual bonus, etc., 33.06 10.04

pending adjudication, to the extent ascertainable

IV. Various cases relating to defective product,

accident causing injuries to third parties, claims

relating to supply of materials etc. 300.74 159.64

V Liability towards interest, penalty/damages as per 14B of 27.05 23.89

Employees Provident Fund and Misc. provision Act, 1952

39.B The Company had deposited 16.00 Lakhs before II Additional Chief Judge,

City Civil Court, Hyderabad against the claim made by M/s. Medvin Hospital

Hyderabad out of said claim the company has acknowledged only

` 2,69,433/- as debts 13.31 13.31

39.C Refund to Andhra Pradesh State Government based on the outcome of the

appeal preferred by the Government in EP No. 124/2006 in O. S. 794/92 6.47 6.47

39.D The GOI had released a Plan Assistance of 200 lakhs to the Company during March 2007 to meet the Capital

Expenditure of HMT Watches Ltd, the wholly owned Subsidiary, in the form of Equity (`100 lakhs) & Loan (`100

lakhs). In view of the non utilisation of the funds by the Subsidiary within the stipulated period, GOI had

instructed the Company during December 2009 for refund of the total Plan Assistance of 200 lakhs. Accordingly,

the Company has refunded the Loan amount of 100 lakhs to GOI during February 2010. However, with regard

to refund of Equity portion, since the Company has already issued 10,00,000 Equity Shares of `10/- each

(`100 lakhs) in favour of President of India during April 2007, as per the terms of GOI sanction, the same could

not be carried out, as it would amount to reduction in Share Capital requiring the approval of the Share Holders

and completion of other statutory formalities as per the Companies Act and applicable rules in this regard, and

the same has been communicated to GOI. Further instructions are awaited from GOI on the same.

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NOTES FORMING PART OF BALANCE SHEET

NoteParticulars

As at As at

No 31-03-2015 31-03-2014

( ` in lakhs )

39.E Preference Share Capital

The Government of India while approving the Revival Plan of HMT Machine Tools Ltd (HMT-MTL), a Subsidiary

Company, during March 2007, had accorded sanction for cash infusion of ` 44300 lakhs in the form of 3.5%

Preference Share Capital which was routed through the Company for investment in the Preference Share

Capital in the Subsidiary, to be redeemed after 3 years i.e. 31.3.2010 out of sale of surplus immovable Properties

of HMT-MTL.

Since the title deeds in respect of the identified immovable properties are not mutated in the name of the HMT-

MTL, the sale of these properties have been approved by the Government as part of the Revival Plans of the

Company (HMT Ltd). The Preference Share Capital will be redeemed upon sale of immovable property.

40 Advances include

40.A Amounts recoverable from employees advances, bonus etc pending

adjudication / negotiations 0.12 0.12

40.B Adhoc payments to employees towards Wage/Salary, DA arrears, if any, 908.91 909.73

41 Balances under ‘Trade Receivables’ , ‘Loans & Advances’, ‘Trade Payables’ and ‘Other Current Liabilities’ are

subject to confirmation, although confirmation has been sought in most of the cases.

42 Value of Special Tools individually costing less than 750 written

off during the year. 55.47 58.62

43 Revenue expenditure on Research & Development charged to

Statement of profit & loss 285.36 230.96

44 Previous year’s figures have been reclassified wherever necessary to conform to this year’s classification.

45 EMPLOYEE BENEFITS:

The Gratuity has been provided by the Company under a Defined Benefit Plan to cover the eligible employees,

the liability being determined on actuarial valuation done by LIC using Projected Unit Credit Method. The Company

has taken a Policy under Group Gratuity Scheme with LIC and annual contributions are made to the extent

required, to the separate Trust constituted and administered by the Life Insurance Corporation of India under

which the coverage is limited to 50,000/- per eligible employee and the balance is being retained in the books

to meet any additional liability accruing thereon.

The provision for gratuity as on 31-03-2015 for the balance amount, based on the above assumptions for over

and above the amount covered under the LIC policy in respect of the Company is 6857.34 lakhs and additional

provision made during the year for full coverage (based on salary at year end) in excess of ` 50000/- per

employee based on actuarial valuation by LIC 1747.13 lakhs.

The provision of ` 989.50 lakhs towards Earned leave encashment and ` 368.45 Settlement allowance is

carried in the books as on 31.3.2015 to cover the eligible employees based on the actuarial valuation done by

qualified Actuary. However, an amount of 244.51 lakhs and ` 54.04 lakhs respectrively has been provided

during the year.

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NOTES FORMING PART OF BALANCE SHEET

NoteParticulars

As at As at

No 31-03-2015 31-03-2014

( ` in lakhs )

The actuarial valuation has been made based on the following assumptions:

Gratuity Earned Leave Encashment Settlement Allowance

1 Retirement Age 60 years 60 years 60 years

2 Future Salary escalation 7% p.a. 6%-8% p.a. 6%-8% p.a.

3 Rate of discount 8% p.a. 8% p.a. 8% p.a.

4 Attrition rate 1 to 3% depending on age 5% p.a. 5% p.a.

5 Mortality rate LIC (1994-96) Ultimate 60 (2006-08) 60 (2006-08)

Ultimate Mortality Table Ultimate Mortality Table

1 Reconciliation of changes in respect of obligations

Present value of obligation as at beginning of year 480.59 513.18 6861.73 - 754.57 - 318.01 -

Interest cost 38.45 41.05 550.16 - 60.04 - 25.43 -

Current Service Cost 0.54 1.25 211.18 - 184.27 - 43.26 -

Benefits Paid 2.00 115.00 2.00 - 8.26 - 0.37 -

Actuarial (gain)/loss on obligations (26.45) 40.11 (49.68) - (1.12) - (17.88) -

Present value of obligation as at end of year 491.13 480.59 7571.39 - 989.50 - 368.45 -

2 Reconciliation of changes in the fair value of plan assets

Fair value of plan assets at the beginning of year 671.20 619.30 671.20 - 0.00 - 0.00 -

Expected return on plan assets 60.07 54.90 60.07 - 0.00 - 0.00 -

Contributions of Employer 0.00 112.00 0.00 - 8.26 - 0.37 -

Benefits paid 2.00 115.00 2.00 - 8.26 - 0.37 -

Actuarial Gain / (Loss) on Plan assets - - - - - - - -

Fair value of plan assets at the end of year 729.27 671.20 729.27 - 0.00 - 0.00 -

Actual Return on Plan Assets - 0.00 - 0.00 -

3 Reconciliation of fair value of plan assets

Fair value of plan assets at beginning of year 671.20 619.30 671.20 - 0.00 - 0.00 -

Present Value of Obligations at the year end 60.07 54.90 60.07 - 989.50 - 368.45 -

Amount recognised in Balance Sheet 0.00 112.00 0.00 - 989.50 - 368.45 -

4 Acturial Gain/Loss recognized

Actuarial gain/(loss) for the year - Obligation 26.45 (40.11) 49.68 - 1.12 - 0.37 -

Actuarial gain/(loss) for the year - plan assets - - - - - - - -

Total (gain)/loss for the year (26.45) 40.11 (49.68) - (1.12) - (0.37) -

Actuarial gain/(loss) recognised in the year 26.45 (40.11) 49.68 - 0.00 - 0.00 -

5 Amounts recognised in the Balance Sheet and Statement of Profit & Loss

Present value of obligations as at the end of the year 491.13 480.59 7571.39 - 989.50 - 368.45 -

Fair Value of plan assets as at the end of the year 729.27 671.20 729.27 - 0.00 - 0.00 -

Actuarial (Gain)/ Loss on Obligation - (1.12) - (0.37) -

Actuarial (Gain)/ Loss on Plan Assets - 0.00 - 0.00 -

Net (Asset)/Liability recongnised in the Balance Sheet 6842.12 - 989.50 - 368.45

* The amounts relating to Financial Year 2013-14 were not reported during the previous year.

( ` in lakhs )

2014-15 2013-14 2014-15 2013-14* 2014-15 2013-14* 2014-15 2013-14*

Gratuity (Funded) Gratuity (unfunded)

Earned LeaveEncashment(Unfunded)

SettlementAllowance(Unfunded)

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Year ended Year ended

31.03.2015 31.03.2014

A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit/(Loss) Before Tax and Extra-ordinary Items (9,656.66) 10,582.04

Adjustment for:

Depreciation & Amortisation 271.35 340.16

Exceptional Items - Interest Waiver - (27,500.23)

Profit on Sale of Fixed Assets (net) 11.99 (0.02)

Amortisation of Special Tools 95.69 102.96

Foreign Exchange (net) - -

Interest debited (Net) 127.24 (524.30)

Dividend received (7.20) (14.40)

Bad debts/advances, obsolete materials written off 346.90 236.78

Provision for slow/non moving inventories, Doubtful debts, Loans & (248.18) 597.79 8,594.27 (18,764.78)

Advances and Investments

Operating Profit Before Working Capital Changes (9,058.87) (8,182.74)

Adjustment for:

(Increase)/Decrease in Trade & Other Receivables 800.02 (902.40)

(Increase)/Decrease in Inventories 966.48 (1,067.20)

(Increase)/Decrease in Other Current Assets 256.11 118.00

Increase/(Decrease) in Trade payables & Other Current Liabilities 3,262.31 2,225.20

5,284.92 373.60

Cash Generated From Operations (3,773.95) (7,809.14)

Direct Taxes paid - -

Cash Flow Before Extra-ordinary Items (3,773.95) (7,809.14)

Extra-ordinary Items - -

NET CASH FROM OPERATING ACTIVITIES (3,773.95) (7,809.14)

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets (7.53) (12.08)

Sale proceeds of Fixed Assets 12.00 0.02

Sale of Investments - -

Dividend Received 7.20 14.40

(Payment)/Receipt-Subsidiaries 217.70 (533.42)

Interest Received 117.13 159.93

NET CASH USED IN INVESTING ACTIVITIES 346.50 (371.15)

CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH 2015( ` in lakhs )

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Particulars

Year ended Year ended

31.03.2015 31.03.2014

(` in Lakhs)

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2015

C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from Issue of Share Capital - 66,074.15

Proceeds from Long Term/Short Term Borrowings 1,946.00 5,256.00

Repayment of Long Term/Short Term Borrowings (128.09) (52,346.38)

Exchange Difference (net) - -

Interest Paid (965.54) (6,882.79)

NET CASH USED IN FINANCING ACTIVITIES 852.37 12,100.98

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (2,575.08) 3,920.69

CASH AND CASH EQUIVALENTS AS AT 1ST APRIL 4,373.51 452.82

(Opening Balance)

CASH AND CASH EQUIVALENTS AS AT 31ST MARCH 1,798.43 4,373.51

(Closing Balance)

(2,575.08) 3,920.69

Note: 1) The above statement has been prepared under the Indirect method as set out in notified AS 3 - Cash Flow Statement.

2) The Cash and Cash Equivalents has been considered as per Note No. 15.

For and on behalf of the Board As per our Report of even date attached

For M/s. DOKANIA S KUMAR & CO.

F.R.N. 322919E

Chartered Accountants

S. Girish Kumar P. Sivarami Reddy B. K. Subash CA. Sushil Kumar Dokania

Chairman & Managing Director Director (Operations) Company Secretary Partner

(Membership No.057020)Place: New DelhiDate : June 18, 2015

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CONSOLIDATED

FINANCIAL STATEMENTS

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To

The Members of

HMT Limited

Report on the Consolidated Financial Statements:

We have audited the accompanying Consolidated financial

statements of HMT Limited (hereinafter referred to as ‘the

Holding Company’), and its subsidiaries (the Holding

Company and its subsidiaries together referred to as ‘the

Group’), its Joint Venture Company, comprising of the

Consolidated Balance Sheet as at 31st March, 2015, the

Consolidated Statement of Profit and Loss and the

Consolidated Cash Flow Statement for the year then ended,

and a summary of the significant accounting policies and

other explanatory information (hereinafter referred to as ‘the

consolidated financial statements’).

Management’s Responsibility for the Consolidated

Financial Statements:

The Holding Company’s Board of Directors is responsible

for the preparation of these consolidated financial

statements in terms of requirements of the Companies Act,

2013 (hereinafter referred to as ‘the Act’) that give a true

and fair view of the consolidated financial position,

consolidated financial performance and consolidated cash

flows of the group including its Joint Venture Company in

accordance with the accounting principles generally

accepted in India, including the accounting standards

specified under section 133 of the Act, read with Rule 7 of

the Companies (Accounts) Rules, 2014. The respective

Board of Directors of the companies included in the Group

are responsible for maintenance of adequate accounting

records in accordance with the provisions of the Act for

safeguarding the assets of the Group and for preventing

and detecting frauds and other irregularities; the selection

and application of appropriate accounting policies; making

judgments and estimates that are reasonable and prudent;

and the design, implementation and maintenance of

adequate internal financial controls, that were operating

effectively for ensuring the accuracy and completeness of

the accounting records, relevant to the preparation and

presentation of the financial statements that give a true

and fair view and are free from material misstatement,

whether due to fraud or error, which have been used for the

purpose of preparation of the consolidated financial

statements by the Directors of the Holding Company, as

aforesaid.

INDEPENDENT AUDITORS’ REPORT

Auditors’ Responsibility:

Our responsibility is to express an opinion on these

consolidated financial statements based on our audit. While

conducting the audit, we have taken into account the

provisions of the Act, the accounting and auditing standards

and matters which are required to be included in the audit

report under the provisions of the Act and the Rules made

there under.

We conducted our audit in accordance with the Standards

on Auditing specified under Section 143(10) of the Act.

Those Standards require that we comply with ethical

requirements and plan and perform the audit to obtain

reasonable assurance about whether the consolidated

financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit

evidence about the amounts and the disclosures in the

consolidated financial statements. The procedures selected

depend on the auditor’s judgment, including the assessment

of the risks of material misstatement of the consolidated

financial statements, whether due to fraud or error. In making

those risk assessments, the auditor considers internal

financial control relevant to the Holding Company’s

preparation of the consolidated financial statements that

give a true and fair view in order to design audit procedures

that are appropriate in the circumstances but not for the

purpose of expressing an opinion on whether the Holding

Company has an adequate internal financial controls

system over financial reporting in place and the operating

effectiveness of such controls. An audit also includes

evaluating the appropriateness of the accounting policies

used and the reasonableness of the accounting estimates

made by the Holding Company’s Board of Directors, as

well as evaluating the overall presentation of the consolidated

financial statements.

We believe that the audit evidence obtained by us and the

audit evidence obtained by the other auditors in terms of

their reports referred to in sub-paragraph (a) of the Other

Matters paragraph below, is sufficient and appropriate to

provide a basis for our qualified audit opinion on the

consolidated financial statements.

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Basis for Qualified Opinion:

HMT Limited

CHO:

1. No actuarial valuation has been obtained in respect of

contributions required for Provident Fund liability by

the Company as per the requirements of AS-15

“Employee Benefits”. The amount of contribution to

Provident Fund is 26.30 Lakhs during the year under

audit.

2. The amount of Gratuity Provision (Unfunded) to be

recognized in Balance Sheet as per actuary valuation

report is ` 6,842.12 Lakhs. Whereas as per Note

No. 5 & Note No. 9 of the Standalone Financial

Statements the aggregate provision amounts to

` 6,857.34 Lakhs.

Tractor Division, Pinjore:

1. No actuarial valuation has been obtained with respect

to the provisions made for Provident Fund and

Outstanding amount has been shown amounting to

` 2,174.38 Lakhs

HMT Watches Limited (As per Statutory Auditors’

Report):

1. Dis-agreement on accounting policies – inappropriate

disclosure

a) The accompanying financial statements have been

prepared assuming that the Company will continue

as a going concern. The accumulated losses of

the Company will continue as at the close of 31st

March, 2015 amounted to ` 251,209.86 lakhs

against which the paid up capital of the Company

is ` 649.01 lakhs and has totally eroded the net

worth of the company. The company has been

incurring continuous operating losses for the past

few years. The total liabilities of the company as

at the close of 31st Mach, 2015 is ` 257,961.59

lakhs against which the fixed and current assets

are only 7400.74 lakhs. The contingent liabilities

disclosed in the financial statements are 6514.14

lakhs and there are other liabilities, which have not

been quantified. The financial statements have been

prepared on the basis of going concern assumption

that raises a substantial doubt about the

Company’s ability to continue as a going concern.

The financial statements do not include any

adjustments that might result from the outcome of

this uncertainty.

b) Certain internal control deficiencies were observed

during the course of audit of financial statements.

The Management has not established adequate

internal controls to ensure that transactions were

properly classified, accounted, reviewed and

reconciled. The Units of the Company did not follow

the established internal controls, such as

performing account reconciliations, obtaining

periodical confirmation of balances, periodical

verification of Fixed Assets, payment vouchers duly

supported by sanctions and providing management

an oversight of the financial management

accounting processes.

c) The Company has not identified, measured,

quantified and disclosed the impairment of assets

and its impact on the current financial statements

in line with the Accounting Standard-28.

d) Depreciation on Leasehold land in the case of

Watch Marketing Division has been computed by

applying straight line method rates of depreciation

as applicable to building as per erstwhile the

Companies Act, 1956 instead of amortizing the

value of leasehold land over the period of lease.

This is contrary to Accounting Standard 06. The

impact of the same on the Net Loss of the Company

and also on carrying cost of tangible assets is not

ascertainable.

e) The details for fixed assets with written down value

of ` 1 lakh and above which have been retired

from active use and disclosed at lower of book or

net realizable value were not made available in

respect of Watch Factory, Ranibagh.

f) Valuation of inventories not being in accordance

with the Accounting Standard 02 –Valuation of

inventories due to:

• Recovery of overheads on the basis of planned

production and not on normal capacity

• Not conducting the physical verification of raw

materials during the financial year 2014-15 and raw

material consumption is not commensurate with

the production during the year compared to the

previous year in respect of Watch Factory,

Bangalore.

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78

• In Watch Factory, Tumkur, the work in progress is

valued at cost instead of on the basis of percentage

of completion basis taking into consideration the

NRV of finished goods.

• In Watch Factory, Tumkur, provision was made

towards obsolescence considering the accretion

to the Work-in-progress instead of accretion to the

Work-in-progress over a period of time and

technological changes. Work in Progress is valued

at Cost instead of lower of Cost and NRV.

• Individual details of slow / non moving goods and

obsolete inventories were not made available to us.

In Watch Marketing Division and Watch Factory,

Ranibagh no provision was made towards non –

moving/slow moving inventories which is contrary

to the accounting policy of the Company.

Accordingly, we are unable to comment on

adequacy of such provisions made in the accounts.

• No provision for additional duty redemption fine and

penalty of 150.00 Lacs was made in the accounts

relating to Watch Components valued at 343.30

Lakhs taken into custody by the Customs

Authorities in the earlier years in Watch Factory,

Ranibagh.

• The Watch Marketing Division has not obtained

confirmation of balances from the Customs

Authorities in respect of watch components taken

into custody by Customs Authorities and included

in Inventories valuing 67.12 Lakhs.

• Valuation of Finished Goods pending receipt of

physical verification certificates in respect of stocks

at show rooms/exhibition/on consignment.

• Closing stock of spares at showroom is reduced

by 51.76% on MRP value to arrive at cost. Basis

for the computation of percentage were not

available. Hence, we are unable to comment on

the accuracy of valuation of such stocks and impact

on the financial statements is not ascertainable.

In view of the above, we do not express an independent

opinion on the correctness of existence and valuation

of inventories. Net effect of the same on the financial

results is not ascertainable.

g) Company has not disclosed contingent liability, if

any, relating to sale of land to Canara Bank and

subsequent claim by third party vide Miscellaneous

Petition No. 62l/622, pending adjudication.

h) As required by Part II, Schedule III of the Companies

Act, 2013, the Statentent of Profit and Loss Account

does not disclose item of income or expenditure

which exceeds one percent of revenue from the

operations or 1 lakh whichever is higher.

i) Finance cost includes interest on delayed payment

of Statutory Dues, instead of disclosing the same

distinctly.

j) Short Term Loans and Advances – Advance

recoverable in cash or in kind includes a sum of

` 14.51 Lakhs being Suspense A/c OBS (Dr

Balance) relating to Watch Marketing Division.

Individual details of such debits are not

ascertainable. They are subject to reconciliation.

Net impact of the same on the financial result of

the unit is not ascertainable.

k) As stated in Note No. 19, no provision is made for

liabilities aggregating 4,305.62 Lakhs in respect

of employee related claims relating to lockouts,

back wages, incentives, annual bonus, etc. This

has resulted in understatement of net loss by

`4,305.62 lakhs and corresponding understatement

of current liabilities to that extent.

l) Except Watch Factory, Ranibagh and Watch

Factory, Bangalore, no provision for the liability

towards the interest payable under Micro, Small

and Medium Enterprises Development Act, 2006,

if any, is made in the accounts. The impact of non-

provision for such interest on the financial results

of the Company is not ascertainable. In the

absence of confirmation from vendors and non-

availability of adequate information with the Units,

provision made towards interest and the principal

amount disclosed as dues as on Balance Sheet

date, we are unable to comment on the adequacy

of the provision and the impact on the financial

statements.

m) In Watch Factory, Bangalore, no provision towards

warranty for the products sold was made in the

accounts. This is contrary to AS — 29.

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79

n) In pursuant to Distress Warrant dated 23 rd

December 2011 issued by Bangalore Mahanagara

Palike for recovery of ` 381.31 Lakhs of property

tax along with penalty for the period from

01.10.1995 to 2011-12, a total provision of 575.68

Lakhs has been made towards such taxes and

penalties as at the 31st March 2015. As the distress

warrant being in the nature of attachment of

movable property towards the property tax, the fact

regarding distress warrant has not been disclosed

in the financial statements.

o) One of the creditor of the company had obtained

Execution Decree dated 30.05.1998 passed in OS

No. 15652 of 2008 for `128 Lakhs. This fact

together with contingent liabilities, if any, has not

been disclosed in the financial statements of the

Company.

p) As required by Part I of Schedule III of the

Companies Act, 2013, the value of office equipment

has not been shown distinctly but is included in

the value of Furniture, Fixtures and Office

Appliances in the Fixed Asset Schedule.

q) In Watch Factory, Ranibagh, as disclosed in Note

No. 12.7 the unit is holding lease hold land of 33.32

acres. The Board in its meeting held on 30.06.2014

has decided to retain 10 acres of land and surrender

balance 23.32 acres to the Forest Authorities. This

fact has not been disclosed.

r) Other current liabilities of 2424.20 lakhs disclosed

in Note No. 10 includes claims suspense account,

statutory dues, EMD, Miscellaneous Recoveries,

etc. As required by Part I, Schedule III to the

Companies Act, 2013, the nature of payables has

not been disclosed.

2. Dis-agreement on accounting issues:

a) Other Current liabilities include a sum of 889.62

Lakhs relating to advances received against sale

of land including buildings. The Company has

executed an Agreement to Sell and the possession

of land (including Buildings) has been given to the

Purchaser. The transaction has not been

recognized as sale pending approval from the

concerned authorities for the execution of sale

deed. The value of land (including buildings) has

been included in the respective head under fixed

assets though there are no future economic benefits

flowing to the Company. The consequential impact

on the losses, carrying amount of the fixed assets,

depreciation and taxes are not ascertainable.

b) Fixed Assets have been transferred from the

Holding Company (HMT Limited) to the company

at the gross values, reserve for depreciation and

net values as on 01.04.2000 in accordance with

Scheme of Arrangement approved by the

Department of Company Affairs. Depreciation has

been charged from the accounting year 2000-2001

and onwards on the original cost of the assets on

straight line basis, keeping in view the estimated

life of the asset. Fixed Assets should have been

recorded at the original cost to Company instead

of at historical cost to HMT Limited. This has

resulted in over statement of gross block by 32.21

Crores. Excess depreciation charged on such

overstatement of Gross Block has not been

quantified. Effect of the same on overstatement of

losses and understatement of net block of assets

are not ascertainable.

c) Gross block of fixed assets in Watch Marketing

Division as on 01.04.2013 is ` 509.51 Lakhs as

against `322.24 Lakhs as per Fixed Asset

Register. The difference of 187.27 Lakhs has not

been reconciled. In the absence of reconciliation,

the impact on the financial statements is not

ascertainable.

d) No physical verification of fixed assets was carried

out during the year in respect of Watch Marketing

Division and Watch Factory, Bangalore. In the

absence of physical verification of fixed assets, we

are unable to comment on material discrepancies

if any, its treatment in the books of account and

impact on the financial results of’ the company

including carrying cost of fixed assets.

e) There are many unspecified/excess credits in

various bank accounts pending reconciliation/

identification of parties amounting to 17.73 Lakhs

carried as other current liabilities in Watch

Marketing Division and its consequential effect on

the net Loss for the year is not ascertainable. This

is continued without reconciliation / identification

for a long time.

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f) There is no system of obtaining periodical

confirmation of balances relating to trade

receivables, trade payables, loans and advances,

current liabilities and provisions and in many cases

the balances are subject to reconciliation. The

effect of the same on current assets and current

liabilities and on the net Loss for the year is not

ascertainable. Reconciliation has not been done

for many years. We are unable to obtain direct

balance confirmation from parties in the absence

of details of parties made available to us.

g) Balances with Banks in Current Account with

Scheduled Banks relating to most of the show

rooms relating to Watch Marketing Division are as

per books of account and are subject to

confirmation by the respective banks.

h) Other Bank balances include deposits with

scheduled banks furnished as margin money to

bank guarantee. Confirmation of balances of Fixed

Deposit held as Margin Money as at the close of

the year has not been obtained.

i) Other liabilities include a sum of ` 39.27 Lakhs

representing Suspense Account OBS (Cr) and

` 1.05 Lakhs representing Suspense Account Bills

(Cr) relating to Watch Marketing Division. Individual

details of such credits / debits are not ascertainable

and are subject to reconciliation. Net impact of the

same on the financial result of the Company is not

ascertainable. This is continued to be shown as

such over a long period of time.

j) Interest on Excise Duty of ` 40.11 Lakhs has

been adjusted against Excise Duty Recoverable –

CENVAT Account in Watch Factory, Ranibagh.

This is not in accordance with the provisions of

CENVAT Credit Rules. Impact of the same on the

financial statements of the Company is not

ascertainable.

k) Service tax liability under reverse charge

mechanism has neither been ascertained nor

provided for in the accounts. Impact of the same

on the Net Loss of the Company is not ascertainable.

l) In the absence of age wise classification of debtors

made available to us, we are unable to express

our opinion on adequacy of provisions towards

doubtful trade receivables made upto 31.03.2015

amounting to 4639.29 Lakhs.

m) The details for interest on delayed payment of

Provident Fund and other statutory dues were not

made available. The Company has neither

ascertained nor worked out the quantum of penal

interest, penalties and damages towards default

in remitting statutory dues. In the absence of such

details, we are unable to express our opinion on

adequacy of provision towards interest on delayed

payment and its impact on financial statements.

n) Interest on delayed settlement of gratuity to

employees beyond 30 days from the date of

retirement has not been provided for in the financial

statements, except in two units. Impact on financial

statements is not ascertainable.

o) No provision towards gratuity amounting to ` 28

Lakhs during training period has been made in the

financial statements as ordered by ALC on the

applications filed by 125 separated employees and

orders of Hon’be High Court of Karnataka to deposit

` 28 Lakhs, which is contrary to Accounting

Standard 29 — Provisions, Contingent Liabilities

and Contingent Assets, resulting in understatement

of loss and current liabilities and provisions to that

extent. Impact on financial statements is not

ascertainable.

p) Profit on sale of fixed assets accounted in the books

include a sum of `1.03 Lakhs relating to disposal

of furniture and other assets by auction in Watch

Marketing Division. No adjustment towards Gross

Block value of assets and depreciation has been

made in the absence of details. The impact of the

same on the carrying amount of fixed assets in

the financial statements and on the Net Loss is

not ascertainable.

q) In Watch Marketing Division, as per decision of

the Board of Directors, some show rooms have

been informed to be closed and the assets

transferred to Global Warehouse, Bangalore. The

assets sent by such show rooms have not been

segregated into fixed assets and stocks and

accounted in the books of Global Warehouse. No

physical verification of such assets were carried

out at the Global Warehouse. In the absence of

physical verification, we are unable to express our

opinion on the value of fixed assets and stock in

trade carried in the financial statements.

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r) In Watch Marketing Division, Retention deposit,

EMD and Security Deposits and other old

outstanding liabilities shown under Other Current

Liabilities continue to be carried forward and many

of the show rooms have been closed. Complete

party-wise details of such deposits are not available

and no steps have been taken to ascertain the

details and review/reconciliation of such deposits.

s) In Watch Marketing Division, the amount of Gratuity

debited to Profit and Loss Account is in excess of

` 56.51 Lakhs. This has resulted in overstatement

of loss for the year and overstatement of long term

provisions to that extent.

t) In Watch Factory, Ranibagh, Net Loss for the year

as per Statement of Profit and Loss Account include

a sum of ` 6.86 Lakhs relating to transition

adjustment on account depreciation on fixed assets

whose useful life expired as on 01.04.2014. Such

transitional adjustment should have been adjusted

against carried amount of Reserves and Surplus

as was done in other units. Transition adjustment

carried out to the Reserves and Surplus also

includes a sum of 6.86 Lakhs. This has resulted

in overstatement of Net Loss for the year and carried

amount of reserves and surplus to that extent.

u) KVAT input credit as per books of Watch Factory

Tumkur is ` 39.59 Lakhs whereas as per KVAT

Form 100 it is 9.58 Lakhs. No reconciliation has

been carried out. In the absence of reconciliation,

impact on financial statements is not quantifiable.

HMT Chinar Watches Limited (As per Statutory

Auditors’ Report):

1. The company decided to close its unit and grant

voluntary retirement to its employees. However, the

total liability on this account is around ` 12 crore

subject to final approval of the Government and to be

accounted thereafter.

2. Balance as at 31st March 2015 in respect of receivables

and payables are subject to confirmation and

reconciliation. Most of them are being carried from

year to year without any adjustment. Trade

Receivables of ` 147.97 lakhs are outstanding for

several years and their financial standing is doubtful

of recovery.

3. The Government of India has already decided to close

the company. However, till the time of closure, the

company will get continuous support from government.

The financial statements have been prepared on going

concern assumption basis and therefore no

adjustments have been considered relating to assets

and liabilities. Also no provision for possibility of claims

and losses which the company may face in future

due to closure. Implementation of recommendations

of Committee of Secretaries made in 2009 is pending

for final implementation to stop further losses.

Qualified Opinion:

In our opinion and to the best of our information and

according to the explanations given to us and based on the

consideration of reports of other auditors on separate

financial statements, except for the effects of the matter

described in the Basis for Qualified Opinion paragraph

above, and except for the following reports made by their

respective Statutory Auditors,:

HMT International Ltd (As per Statutory Auditors’

Report):

Provident Fund is provided for, under a defined benefit

scheme. The Contributions are made up-to-date to the Trust

administered by the Company. However, the Company has

not obtained actuarial valuation, as per Accounting Standard

15 (Revised) and hence, consequential effects on accounts

could not be reported.

HMT Machine Tools Ltd (As per Statutory Auditors’

Report):

The Company has not determined by actuarial valuation

liability for Provident Fund dues as at 31st March, 2015.

Consequent effect of the same on the financial statements

for the year is not ascertainable. As per AS 15, where in

terms of any plan the enterprise’s obligation is to provide

the agreed benefits to current and former employees and

the actuarial risk (that benefits will cost more than expected)

and investment risk fall, in substance, on the enterprise,

the plan would be a defined benefit plan. Accordingly,

provident funds set up employer which require interest

shortfall to be met by the employer would be in effect defined

benefit plan in accordance with the requirements of

paragraph 26(b) of AS 15. Hence this is not in compliance

with the Accounting Standard 15 “Employee Benefits”

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82

The aforesaid consolidated financial statements give the

information required by the Act in the manner so required

and give a true and fair view in conformity with the accounting

principles generally accepted in India, of the consolidated

state of affairs of the Group, as at 31st March, 2015, and

their consolidated loss and their consolidated cash flows

for the year ended on that date.

Consolidated Financial Statements of HMT Limited:

The previous year’s figures of consolidated financial

statement of HMT Limited were not included with the figures

of Sudmo-HMT Process Engineers (India) Limited.

Therefore, we are unable to comment on comparison of

current year’s data with previous year’s data.

Emphasis of Matter:

HMT Watches Limited (As per Statutory Auditors’

Report):

i) We draw attention to “Basis of preparation of financial

statements” disclosed in significant accounting

policies to the financial statements which states that

the financial statements are prepared as of a going

concern inspite of substantial operational losses being

incurred and company’s operations are negligible

compared to the installed capacity of working.

ii) Note No. 12.2 – regarding inclusion of immovable

properties in Gross Block of the fixed assets, vested

under the Scheme of Arrangement approved by

Government of India and non-carrying of the mutation

of title deeds in the revenue records to that effect.

Hence, the title to the immovable properties could not

be ensured.

iii) Note No. 12.4 – regarding possession of gifted land

located at Bangalore admeasuring 89.74 acres of

which 7.0 acres of land encroached upon and the

matter taken up with the Government of Karnataka to

shift the un-authorized occupants. Though the

Company is in possession of lands at various units, it

has not obtained up-to date encumbrance certificates

from the concerned authorities to ascertain the extent

of encroachment/title verification.

iv) Note No. 12.5 – regarding non identification of

equivalent value of land sold and transferred during

2003-04 based on a MOU entered into between HMT

Ltd and the Company. Certain lands were sold and

the profit on sale of such lands amounting to 1,421

Lakhs were accounted in books of account of HMT

Limited Holding Company and equivalent value of the

land has not yet been identified and transferred to the

company.

v) Note No. 19.0 disclosing Contingent Liabilities and

Commitments to the extent not provided for in the

accounts aggregating 6,514.46 Lakhs. The Company

has neither ascertained nor provided for further liabilities

if any, towards interest, penal interest and / or

damages in respect of these contingent liabilities

vi) Note No. 19.1, 19.2, 19.3 and 19.4 – regarding

pendency of sales tax assessments, suits filed by

employees and non ascertainment of liabilities on sale

of land. Respectively, not provided for in the accounts

vii) Note No. 38.0 regarding non refund of 100 Lakhs to

GOI out of 200 Lakhs – Plan Assistance received

during March 2007 for meeting capital expenditure and

accounting of FD in favour of Holding Company.

viii) Note No. 41 (b) regarding inclusion of 991.03 Lakhs

being the amount paid by way of adhoc to employees

towards wage / salary / DA / revision arrears if any,

pending adjustment for which necessary provision has

been made in the accounts to the extent of 1868.24

Lakhs. No adjustment towards the corresponding

advance account has been made during the year in

respect of settlements made during the year. The

Company has not reviewed the settlements made in

the past and taken action to adjust the advances.

ix) Note No. 47 regarding disclosure as per Accounting

Standard 15 (Revised). The detailed workings were

not made available and we have relied on the intimation

received from the Holding Company. Further, no

reconciliation of opening balance and closing balance

of the present value of the defined benefit obligations

showing separately the effect attributable to current

service cost, interest cost, contribution to be made

has not been ascertained from the holding company

and disclosed in the financial statements as required

by Accounting Standard 15 on ‘Employee Benefits’.

HMT Bearings Limited (As per Statutory Auditors’ Report):

We draw attention to the following matters presented

in the financial statements:

1. Note B 1 of Notes forming Financial Statements

wherein it is stated that these statements were

prepared based on going concern basis.

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83

The Company was declared a Sick Company under

Section 3(1)(o) of Sick (Special Provisions) Act, 1985

vide order no. 501/2009 dt 23/04/2009. Except

submission of business plan/draft rehabilitation

scheme to operating agency, there is no progress at

all even during the current year.

It is learnt that Cabinet Committee on Economic

Affairs has proposed for closure of the company.

However, no final decision has yet been taken.

As such, as stated above, the financial statements

are prepared as of a going concern.

2. Some of the balances under Trade Payables, Short

Term Liabilities, Other Current Liabilities, Trade

Receivables and Loans and Advances are subject to

confirmations.

3. HMT Tractors Division, Pinjore:

It was observed during our audit that there is inordinate

delay in making payments by Tractors Division –

Pinjore against supplies made by BLH. Details of

interest belated payments are as follows:

Year Amount ( ` in lakhs)

2010-11 14.57

2011-12 27.10

2012-13 39.34

2013-14 15.94

2014-15 24.87

In the absence of acceptance of these amounts by the

customer, the above figures were not accounted in the

books.

HMT Machine Tools Limited (As per Statutory Auditors’

Report):

1. Non – confirmation of trade payables, receivables,

Advances, and margin money deposit the

consequential effect on the financial statements is not

ascertainable.

2. No provision is made for the liability if any, towards

the interest payable under Micro, Small and Medium

Enterprise Development Act 2006 to the extent of non-

confirmation of balances by the vendors as on 31st

March 2015. The impact on non provision of such

interest on the financial result cannot be quantified

due to unavailability of required information.

Our opinion is not qualified in respect of these matters.

HMT Chinar Watches Limited (As per Statutory

Auditors’ Report):

Without qualifying their report, they have drawn attention

on the following matters:

a) The Para nos. 1 and 8 of Note B-21 to the financial

statements regarding net worth of Company- Now the

company is fully dependent on the Government

budgetary support for meeting its recurring

expenditures. Due to losses in the current year and in

the past, net worth of the Company has been fully

eroded. The Company’s management is in the process

to shut operations through sale of its assets through

auction and grant voluntary retirement scheme to its

employees. The company has accumulated deficits

and the net worth of the Company has been totally

eroded. The negative net worth is 58,220 Lacs as at

March 31, 2015. However, as per information and

explanations given to us the company will get

continued support from the Government of India, hence

financial statements have been prepared on Going

Concern Assumption basis. Consequently, no

adjustments have been made in accounts relating to

the recoverability of recorded assets amounts and in

respect of recorded liabilities and contingent liabilities

that might devolve on the Company.

b) Para No. 9 of Notes B21 to the financial statements

regarding impairment of assets, the Company has

taken a certificate from Technical Expert Committee

of the Company for net realizable value of fixed assets

and according to the certificate the net realizable value

is more than the carrying value of fixed assets as at

March 31, 2015, hence no adjustments have been

made in the books of accounts of the Company in

respect of impairment of fixed assets.

c) Para 10 of Notes B 21 to the financial statements

regarding VRS of employees approved by Department

of Heavy Industries, basis and quantum of

compensation is to be finalized by the government to

reduce further accumulation.

Other Matters:

1. We did not audit the financial statements / financial

information of the subsidiaries whose financial

statements / financial information reflect total assets

of ` 50,261.87 Lakhs as at 31st March, 2015, total

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84

revenues of ` 25,915.91 Lakhs and net cash flows

amounting to 1,692.16 Lakhs for the year ended on

that date, as considered in the consolidated financial

statements. We did not audit the financial statement/

financial information of joint venture company whose

financial statements reflect total assets of ` 44.77

Lakhs and total revenue of `3.81 Lakhs for the year

ended on that date, as considered in the consolidated

financial statements. The consolidated financial

statements also include the Group’s share of net loss

of ` 55,700.01 Lakhs for the year ended 31st March,

2015, as considered in the consolidated financial

statements, in respect of its joint venture company,

whose financial statements / financial information have

not been audited by us. These financial statements /

financial information of the subsidiaries and joint

venture entity are audited by other auditors whose

reports have been furnished to us by the Management

and our opinion on the consolidated financial

statements, in so far as it relates to the amounts and

disclosures included in respect of the subsidiaries and

joint venture company, and our report in terms of sub-

sections (3) and (11) of Section 143 of the Act, in so

far as it relates to the aforesaid subsidiaries and Joint

Venture company, is based solely on the reports of

the other auditors.

2. In our Independent Auditors’ Report of Holding

Company, we have reported

a. We did not audit the financial statements of certain

branches/units. These have been audited by other

Branch Auditors whose reports have been furnished

to us and our opinion is solely based on the reports of

Other Branch Auditors.

b. The financial statements of Lamp Division have been

merged with CHO Accounts and our report in so far as

it relates to the amounts included in respect of this

Division is based solely on Closing Balances of Last

Year’s Financial Statement of CHO Accounts.

c. The Physical share certificates for 26,08,99,037 Equity

Shares of M/s. HMT Machine Tools Ltd having value

of ` 26,089.90 Lakhs and 4,43,00,000 Preference

Shares of M/s. HMT Machine Tools Ltd having value

of ` 44,300.00 Lakhs are not in the possession of

the Company.

d. Payments to third parties are being made relating to

SUDMO-HMT Engineering (India) Ltd, Joint Venture

Company, are paid by the Company against which it

receives the reimbursements from them.

e. The Branch Auditors of Tractor Division, Pinjore have

Reported the following other matters:

a) Balance in Current Maturities of GOI Loans – Statutory

Dues and Working Capital and Bridge Loan as given

in Note – 9 of the division’s Balance Sheet amounting

` 2148.64 Lakhs has been given and we have relied

on the basis of the Certificate received from the

Management.

b) During the year 2014-15, the Management has

declared doubtful debts amounting 4410.10 Lakhs

which is very high in percentage and full provision has

been made in the Profit & Loss Account and

accordingly, provision has been made of interest

receivable on debts amounting 4756.73 Lakhs and

we have relied upon the certificate obtained from the

Management.

c) During the year 2014-15, the provision for obsolensce

has been shown by the Company amounting 438.29

Lakhs and we have relied upon the Certificate received

from the Management of the Company.

Our opinion on the consolidated financial statements,

and our report on Other Legal and Regulatory

Requirements below, is not modified in respect of the

above matters with respect to our reliance on the work

done and the reports of the other auditors and the

financial statements / financial information certified by

the Management.

3. The Statutory Auditors of HMT Watches Ltd have

reported:

i) The accounting of the following is as per Holding

company’s (HMT Limited) directions which are not

verified by us, in the absence of detailed workings

made available:

o Leave encashment provisions

o Gratuity provisions

o Settlement allowance

o Interest on loan from Holding company

o Loan from Government of India and HMT

Limited

o Interest subsidy on loan from Holding

company.

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85

ii) Company has not constituted an Audit Committee

as required under the provisions of Section 177 of

the Companies Act, 2013. The Internal Audit Reports

are not reviewed by the Management periodically

and corrective action taken to report compliance

to the Board.

iii) The company does not have a qualified Company

Secretary as required under the provisions of

Section 203 of the Companies Act, 2013

4. The Statutory Auditors of HMT Machine Tools Ltd

have reported:

We did not audit the financial statements of Six

Branches included in the Financial Statements of the

Company for the year ended on that date, as

considered in the Financial Statements. The financial

statements of these branches have been audited by

the branch auditors whose reports have been furnished

to us, and our opinion in so far as it relates to the

amounts and disclosures included in respect of these

branches, is based solely on the report of such branch

auditors.

Our opinion is not qualified in respect of this matter.

5. The Statutory Auditors of HMT Chinar Watches

Ltd have reported:

The financial statements of the Company as at March

31, 2014 and for the year then ended were audited by

another firm of Chartered Accountants M/s S. K.

Patodia & S who vide their report dated July 19, 2014

expressed an opinion on those Financial Statements.

Report on Other Legal and Regulatory Requirements:

1. As required by the Companies (Auditor’s Report) Order,

2015 (‘the Order’), issued by the Central Government

of India in terms of sub-section (11) of Section 143 of

the Act, based on the comments in the auditors’

reports of the Holding company, subsidiary

companies, incorporated in India, we give in the

Annexure a statement on the matters specified in

paragraphs 3 and 4 of the Order, to the extent

applicable. In the opinion of the auditors of joint venture

Company, the reporting requirements under the order

are not applicable and accordingly they have not

reported on the matters specified in paragraphs 3 and

4 of the Order.

2. As required by Section 143(3) of the Act, we report,

to the extent applicable, that:

a) We have sought and, except for the possible effect

of the matter described in sub-paragraph (b) of the

Basis for Qualified Opinion above, obtained all the

information and explanations which to the best of

our knowledge and belief were necessary for the

purposes of our audit of the aforesaid consolidated

financial statements.

b) In our opinion, except for the effect of the matters

described in the Basis for Qualified Opinion

paragraph above, proper books of account as

required by law relating to preparation of the

aforesaid consolidated financial statements have

been kept so far as it appears from our examination

of those books and the reports of the other auditors.

c) Except for the matter described in Basis for

Qualified Opinion paragraph above, the reports on

the accounts of the branch offices of the Holding

Company, and its subsidiaries, incorporated in

India, audited under Section 143 (8) of the Act by

branch auditors have been sent to us / the other

auditors, as applicable, and have been properly

dealt with in preparing this report.

d) The Consolidated Balance Sheet, the Consolidated

Statement of Profit and Loss, and the Consolidated

Cash Flow Statement dealt with by this Report are

in agreement with the relevant books of account

maintained for the purpose of preparation of the

consolidated financial statements.

e) In our opinion, except for the effect of the matters

described in the Basis for Qualified Opinion

paragraph above, the aforesaid consolidated

financial statements comply with the Accounting

Standards specified under Section 133 of the Act,

read with Rule 7 of the Companies (Accounts)

Rules, 2014.

f) The matters described in the Basis for Qualified

Opinion paragraph above, in our opinion, may have

an adverse effect on the functioning of the Group.

g) On the basis of the written representations received

from the directors of the Holding Company as on

31st March, 2015 taken on record by the Board of

Directors of the Holding Company and the reports

of the statutory auditors of its subsidiaries – HMT

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Bearings Ltd, HMT Chinar Watches Ltd, Joint

Venture Company – Sudmo-HMT Process

Engineers (India) Limited, incorporated in India,

none of the directors of the said companies, its

company incorporated in India is disqualified as

on 31st March, 2015 from being appointed as a

director in terms of Section 164 (2) of the Act.

On the basis of reports of its Subsidiary

Companies –

HMT Watches Ltd: Based on the Notification No.

GSR829(E) dated 21.10.2003 issued by the

Department of Company Affairs, Government of

India, the requirements under sub-section (2) of

Section 164 of the Companies Act, 2013 does not

apply to the Company, being a Government

Company.

HMT Machine Tools: Being a government Company

provisions of section 164(2) of the Companies Act,

2013 is not applicable as per notification dated 5th

June, 2015 issued by Department of Company

Affairs, Government of India

HMT International Ltd: Being a government

Company, provisions of section 164(2) of the Act,

is not applicable, regarding appointment of Directors

h) The qualification relating to the maintenance of

accounts and other matters connected therewith

are as stated in the Basis for Qualified Opinion

paragraph above.

i) With respect to the other matters to be included in

the Auditor’s Report in accordance with Rule 11 of

the Companies (Audit and Auditor’s) Rules, 2014,

in our opinion and to the best of our information

and according to the explanations given to us:

i. Except for the possible effects of the

matters described in the Basis of Qualified

Opinion paragraph and the Auditors’

Report of HMT Watches Ltd, the

consolidated financial statements disclose

the impact of pending litigations on the

consolidated financial position of the Group

- Refer Note 34 to the consolidated

financial statements. There were no

pending litigations against the Joint

Venture Company as per the report of their

respective auditor.

The amount pertaining to tax related claims

pending in appeal under the head “Others”

for the period ended as on 31st March 2014

has been changed in the audited financial

statements of HMT Watches Limited from

` 0.40 Lakhs to `1,077.26 Lakhs. In the

consolidated report, we have taken only

0.40 as it was reflected in the previous

year’s report of HMT Watches Ltd.

ii. Except for the possible effects of the

matters described in the Basis of Qualified

Opinion paragraph above, the Group, its

Joint Venture Company did not have any

material foreseeable losses on long term

contracts. There are no derivative contracts

entered into by the Group and its Joint

Venture Company.

iii. There were no amounts which were

required to be transferred to the Investor

Education and Protection Fund by the

Holding Company, and its subsidiary

companies, Joint Venture Company

incorporated in India.

For DOKANIA S.KUMAR & CO.

Firm Registration Number. 322919E

Chartered Accountants

(CA. Sushil Kumar Dokania)

Partner

Membership No.057020

Place: Bangalore

Date: 10-08-2015

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Annexure to the Independent Auditors’Report

As stated in Para 1of the ‘Report on Other Legal and

Regulatory Requirements’ in our Auditors’ report of

even date, the following statement is based on the

comments in the Auditors’ reports on the standalone

financial statements of the Holding Company and

subsidiary companies incorporated in India.

I.a) The Holding company and its subsidiary companies

have maintained proper records showing full

particulars, including quantitative details and situations

of Fixed Assets except in case of HMT Watched

Limited.

b) The Holding Company and its subsidiary companies

incorporated in India have a regular programme of

physical verification of its fixed assets by which all

fixed assets are verified over a period of three years.

In our opinion, this periodicity of physical verification

is reasonable having regard to the size of the Group

and the nature of its assets. In accordance with this

programme, the fixed assets have been physically

verified by the management except in case of HMT

Watches Limited and Marketing Divisions of HMT

Machine Tools Ltd located at Bangalore and

Hyderabad Units and no material discrepancies have

been noticed on such verification.

II.a) The inventory, except in case of one of the Divisions

of HMT Watches Ltd and Hyderabad and Praga Units

of HMT Machine Tools Ltd, has been physically verified

by the respective management of the Holding

Company and its subsidiary companies incorporated

in India during the year. In our opinion, the frequency

of such verification is reasonable. In respect of

inventory lying with third parties, neither physical

verification was conducted nor have written

confirmations been obtained.

b) The procedures for the physical verification of

inventories followed by the management as referred

to above are reasonable and adequate in relation to

the size of the respective company and the nature of

its business except in case of HMT Watches Ltd.

c) The Holding Company and its subsidiary companies

incorporated in India are maintaining proper records

of inventory except in case of one of the Divisions of

HMT Watches Ltd, wherein proper records for stock

in trade (Watched and Spares) were not maintained.

The discrepancies noticed on verification between the

physical stocks and the book records were not

material. In case of HMT Watches Ltd, no physical

verification certificates in respect of stocks at show

room/exhibition/on consignment are made available

to their auditors and hence, they were unable to

comment on Material discrepancies if any in respect

of such stocks and its treatment in their books of

accounts. In case of HMT Bearings Ltd, their Statutory

Auditors observed that the material issue price as

captured by the inventory package is not inclusive of

CST component and suitable rectification is yet to be

made in the software.

III.a) As informed to us, the Holding company has granted

loans to the bodies corporate, but hasnot maintained

a register U/s 189 of the Companies Act, 2013.The

subsidiary companies incorporated in India have not

granted any loans, secured or unsecured, to

companies, firms or other parties covered in the register

maintained by it under Section 189 of the Act.

b) In the case of granting of loans to body corporates,

the borrowers have been regular in the payment of

interest. The terms of agreements do not stipulate

any repayment schedule and the loans are repayable

on demand. Accordingly, Sub-Clause (b) of the Clause

(iii) of the Paragraph 3 of the Order is not applicable.

c) According to the information given to us, there are no

overdue amounts more than Rupees One Lakh in

respect of the loans granted to the bodies corporate

by the Holding Company.

IV. In their opinion and according to the information and

explanations obtained by the statutory auditors of the

Holding Company and its subsidiary companies

incorporated in India, these companies have an

adequate internal control system commensurate with

the respective size of each company and the nature

of its business with regard to purchase of inventories

and fixed assets and sale of goods and services except

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88

that for HMT Watches Ltd with regards to purchase of

inventory. There is no continuing failure to correct major

weaknesses in internal control system in any of these

companies except in case of HMT Watches Ltd. As

reported by the Statutory Auditors of HMT Watches

Ltd, in regard to sale of watches and its spares and

services, the internal control system needs to be

further strengthened in Global Warehouse. In their

opinion the internal control procedures of HMT

Watches Ltd, needs to be further strengthened in the

areas of reconciliation and obtaining confirmation of

balances in respect of bank balances (relating to

Watch Marketing Division), trade receivables, trade

payables and advance received against sales. There

is no audit committee constituted during the year.

V. The Holding Company and its subsidiary companies

incorporated in India have not accepted any deposits

in accordance with the provisions of Sections 73 to

76 of the Act and the rules framed there under.

VI. The branch auditors of the Tractor Division and Food

Processing Units of Holding Company, Statutory

Auditors of HMT Bearings Ltd and HMT Machine Tools

Ltd have broadly reviewed the books of account

maintained by each company pursuant to the rules

prescribed by the Central Government for maintenance

of cost records under 148(1) of the Act wherever

applicable and are of the opinion that prima facie, the

prescribed accounts and records have been made and

maintained. However, the statutory auditors have not

made a detailed examination of the records. For Other

subsidiary companies incorporated in India, the Central

Government has not prescribed the maintenance of

cost records under 148(1) of the Companies Act, 2013,

for the products and services of the Company.

VII. a) According to the information and explanations given

to and on the basis of the examination of the records

of the HMT International Ltd by their respective

statutory auditors, amounts deducted/accrued in the

books of account in respect of undisputed statutory

dues including Provident Fund, Employees’ State

Insurance, Income tax, Sales tax, Wealth tax, Service

tax, Customs duty, Excise duty, Value added tax,

Cess, Professional tax and other material statutory

dues, as applicable, have been generally regularly

deposited during the year by each of these companies

with the appropriate authorities. On the basis of

examination of records of HMT Watches Ltd, HMT

Machine Tools Ltd by their respective Statutory

Auditors, the companies have not been regular in

depositing undisputed statutory dues including

Provident Fund, Employees’ State Insurance, Income

tax, Sales tax, Wealth tax, Service tax, Customs duty,

Excise duty, Value added tax, Cess, Professional tax

and other statutory dues with the appropriate

authorities. According to the information and

explanations given to and on the basis of the

examination of the records of the HMT Bearings Ltd

by their respective statutory auditors, except for slight

delays in deposit of ESI, Provident Fund dues, Taxes

deducted at Source, Service Tax, the Company has

been generally regular in depositing undisputed

statutory dues including Investor Education and

Protection Fund, Sales Tax, Custom Duty, Excise

Duty, Cess and any other material statutory dues

applicable to it. According to the information and

explanations given to and on the basis of the

examination of the records of the HMT Chinar Watches

Ltd, the Company is not regular in depositing the

undisputed statutory dues in respect of Provident Fund,

Income-tax though there is no delay in depositing

Sales-tax, Wealth Tax, Service Tax, Custom Duty,

Excise Duty, Value Added Tax or any other material

statutory dues.

According to the information and explanations given

to the statutory auditors of HMT Bearings Ltd and HMT

International Limited, no undisputed dues in respect

of Provident Fund, Employees’ State Insurance,

Income tax, Sales tax, Wealth tax, Service tax,

Customs duty, Excise duty, Value added tax, Cess,

Professional tax and other material statutory dues

were in arrears as at March 31, 2015 for a period of

more than six months from the date they became

payable.

According to the information and explanations given

to the statutory auditors of the Holding Company, its

subsidiary companies incorporated in India except

those mentioned above, following are the undisputed

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dues in respect of Provident Fund, Employees’ State

Insurance, Income tax, Sales tax, Wealth tax, Service

tax, Customs duty, Excise duty, Value added tax,

Cess, Professional tax and other material statutory

Sr. No. Nature of Statute Nature of Dues Amount (` ` ` ` ` )Period to which

amount related

HMT Limited-Corporate Head Office:

1. Income Tax* TDS Defaults 349613.95 2014 – 15

2. Income Tax* TDS Defaults 1882503.25 2013- 14

3. Income Tax* TDS Defaults 2059936.74 2012-13

4. Income Tax* TDS Defaults 180257.95 2011-12

5. Income Tax* TDS Defaults 5182992.87 Prior Years

6. Greater Hyderabad Municipal Property Tax 15218224.00 Previous Years

Corporation 7815398.00 Arrear Penalty

4776018.00 Current Tax

TOTAL 37464944.76

* Income Tax Website

dues that were in arrears as at March 31, 2015 for a

period of more than six months from the date they

became payable.

Sr. No. Nature of Statute Nature of Dues Amount (` ` ` ` ` )Period to which

amount related

Tractor Division, Pinjore:

1. Pinjore Sales Tax Interest on Demand 21773033.00 2001-02 to

2005-06

2. Sales Tax Sales/ VAT Tax 2001521.00 November 2013-

September 2014

3. CPF Provident Fund 49849972.00 Nov - 2013

Sept 2014

4. EPF Provident Fund 52246226.00 Nov - 2013

Sept 2014

5. EPS Provident Fund 3718381.00 Nov - 2013

Sept 2014

6. VPF Provident Fund 28928500.00 Nov -2013

Sept- 2014

7. PF Loan and Interest Provident Fund 53935211.00 Nov-2013

Sept-2014

8. Professional Tax Professional Tax 10200.00 Nov - 2013

Sept - 2014

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HMT Watches Limited (As per their Statutory Auditors’ Report): WMD Division:

Sr.Nature of Statute Nature of Dues Amount (` ` ` ` ` )

Period to which Date of

No. amount related Payment

1. Karnataka Sales Sales tax dues and 9879325.05 Not available Not paid

Tax Act and CST interest

2. The Jammu Kashmir Sales tax dues 6984 Balance as on Not paid

General Sales Tax 1.4.2011

Act, 1962

3. The Punjab Sales Sales tax dues – 533674 1983-84 Not paid

Tax Act Chandigarh Showroom

4. The Madhya Pradesh Sales tax dues- Bhopal 1228460 Not available Not paid

General Sales Showroom

Tax Act, 1958

5. The Assam General Sales tax dues- 254177 2002-03 Not paid

Sales Tax Act, 1993 Gawhati Showroom 2003-04

6. Provident Fund Employees 7099147 2014-15 Not paid

Contribution to PF

7. Provident Fund Employers Contribution 2271855 2014-15 Not paid

to PF

8. Sales Tax Sales Tax 8334695.40 Not available Not paid

9. Income – TDS Income Tax – TDS- V 495139 Not available Not paid

Nagraj- Sri Mookambika

Travels

Watch Factory, Bangalore:

1. Income Tax Act, 1961 TDS 7750 Not available Not paid

2. Finance Act, 1994 Service Tax 181925 Not available Not paid

3. Central Excise Duty Excise duty interest 4418535 Not available Not paid

4. Provident Fund PF – Employers 1192327 Not available Not paid

Watch Factory, Tumkur:

1. Gratuity Gratuity 2368.49 Not available Not paid

Watch Factory, Ranibagh

1. Provident Fund PF 65081672 Outstanding for

the period Apr 14 Not paid

to Mar 15

2. Pension Fund Pension Fund 5985892 Outstanding for

the period Apr 14 Not paid

to Mar 15

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HMT Machine Tools Ltd(As per their Statutory Auditors’ Report):

Sr.Nature of Dues

Amount Period to which Date of

No (` in Lakhs) amount related Payment

1. Provident Fund, VPF and SPF 1645.91 Not available Not paid

2. Value Added Tax & CST 58.98

3. Pension Contribution 50.52 Not available Not paid

4. Income Tax (TDS) 17.36 Not available Not paid

5. Gratuity Settlement 461.83 Not available Not paid

6. Professional tax 210.84 Not available Not paid

7. Employee State Insurance 2.53 Not available Not paid

8. Property Tax 210.84 Not available Not paid

HMT Chinar Watches Ltd. (As per their Statutory Auditors’ Report):

Sr.Nature of Dues

Amount Period to which Date of

No (` in Lakhs) amount related Payment

1. Provident Fund 12.72 Not available Not paid

2. TDS on Holding Company Not available Not paid

b) According to the information and explanations given to the statutory auditors of HMT International Ltd, HMT

Bearings Ltd and HMT Chinar Watches Ltd, there are no dues of Income tax, Sales Tax, Wealth Tax, Service Tax,

Customs Duty and Excise, Employees’ State Insurance and Value Added Tax or Cess which have not been

deposited on account of any dispute. According to the information and explanations given to the statutory auditors

of the holding company, its subsidiary companies incorporated in India such dues of Income tax, Wealth tax,

Sales Tax, Value added tax, Service tax, Customs duty, Excise duty and Cess as have not been deposited with

the appropriate authorities on account of any dispute are as follows:

Sr.Nature of Authority

Amount Period

No (` ` ` ` ` ) in lakhs

HMT Limited - Food Processing Unit

1. Appeal before Joint Commissioner (Appeal), 2.96 1989-90

2. Aurangabad 39.05 1999-00

3. 25.71 2000-01

4. 14.78 2001-02

5. 13.48 2003-04

6. 9.35 2004-05

TOTAL 105.33

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Sr.Nature of the Statue Nature of Dues

Amount

No (` ` ` ` ` ) in lakhs

HMT Watches Limited

(As per their Statutory Auditors’ Report):

1. Sales Tax 189.33

2. Customs Act, 1962 Custom Duty, Redemption fine and Penalty 212.29

3. Central Excise Act, 1944 Goods seized 169.33

4. Others 1077.26

5. Employees Provident Fund and Interest under sec. 7Q of PF Act (Penal Interest

Misc. Provisions Act, 1952 for damages under Sec. 14F of the PF Act) 4305.62

6. Arbitration Arbitration cases 560.63

Sr.Nature of Authority Nature of Dues

Amount (` ` ` ` ` ) Forum where the Unit

No. in Lakhs dispute is pending

HMT Machine Tools Limited

(As per their Statutory Auditors’ Report):

1. Central Excise Act, Cenvat Credit 221.17 CESTAT Bangalore

1944, Cenvat Rules Complex

Division

2. Central Excise Reversal of Cenvat Credit 6.42Bangalore

JT. COMM.CE(APPELS) Complex

Division

3. Central Excise Reversal of Cenvat Credit 4.73 JT. COMM.CE(APPELS)Bangalore

Complex

Division

4. Central Excise Reversal of Cenvat Credit 91.89 JT. COMM.CE(APPELS)Bangalore

Complex

Division

5. BBMP Property Tax 987.72Hon’ble Karnataka Bangalore

High Court Complex

Division

6. Central ExciseModvat Credit 1.60 CESTAT

Hyderabad

Act, 1944 Unit

7. Central ExciseModvat Credit 39.36

Availment of Excise duty Hyderabad

Act, 1944 exemption under 10/97 Unit

8. The Employees stateESI dues Employees 1.16

ESIC Court, Hyderabad Praga

insurance Act, 1948 Division

9. The Employees stateESI dues Employees 1.42

ESIC Court, Hyderabad Praga

insurance Act, 1948 Division

c) According to the information and explanations given to and on the basis of the examination by the statutory auditors

of the records of the Holding Company, its subsidiary companies incorporated in India, the amounts required to be

transferred by the Holding Company to Investor Education and Protection Fund in accordance with the relevant

provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder the group did not have any dues on

account of Investor Education and Protection Fund.

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VIII. HMT International Limited has no accumulated losses

at the end of the year on a standalone basis and has

not incurred cash losses on a standalone basis in the

current year and in the immediately preceding financial

year.

The Holding Company has accumulated losses of

` 95,858.07 Lakhs at the end of the financial year on a

standalone basis and it has also incurred cash losses

of 9,385.31 Lakhs on a standalone basis in the current

year (no cash losses in the immediately preceeding

financial year).

HMT Watches Ltd has accumulated losses of

` 251209.86 Lakhs on a standalone basis as at the

close of 31st March, 2015, against which paid up capital

is 649.01 Lakhs and the Company has incurred cash

losses during the current year as well as in the

immediately preceeding financial year on a standalone

basis. The net-worth of the Company has fully eroded

at beginning of the financial year and the accumulated

losses exceed the share capital of the Company

consequently affecting the Going Concern assumption

of the Company.

The accumulated losses of HMT Machine Tools Ltd

have exceeded its net worth on a standalone basis.

Consequently, the Company has filed application with

BIFR during November, 2005 as per the provision of

Sick Industrial Companies (Special Provisions) Act,

1985 and the sanction is received on June 13, 2008.

Also during the year 2007-08, Government of India has

sanctioned a revival plan envisaging infusion of funds

by way of Preferential and Equity Capital, conversion

of long term loan into Equity Capital and waiver of

interest to address the negative net worth of the

Company. Though the appeals before AAFIR and BIFR

sanctions pending disposal, considering the revival plan

of the company and BIFR sanctioned rehabilitation

scheme, the accounting continues to be prepared on

Going Concern basis. The Company has incurred cash

loss of 12,625.13 Lakhs during the year and 4369.98

Lakhs for the previous year on a standalone basis.

HMT Bearings Ltd has accumulated losses at the end

of financial year and has incurred cash losses during

the financial year on a standalone basis. The paid up

capital of the Company is ` 37.70 Crores and the

accumulated losses are 148.46 Crores on a standalone

basis. The accumulated losses are more than fifty

percent of the net worth of the Company. The Company

was declared as Sick Industrial Undertaking under

Section 3(1) of the SIC Act, 1985 on April 23, 2009.

The accumulated losses of HMT Chinar Watches Ltd

have exceeded 50% of its net worth as at 31st March,

2015. The Company has incurred cash losses of

` 4,891 Lakhs in current financial year and ` 5,045

Lakhs in preceding financial year.

On a consolidated basis, there are accumulated losses

of ` 5,33,707.76 Lakhs at the end of the year which

exceeds the fifty percent of their consolidated net worth,

and have incurred cash losses of ` 54,348.85 Lakhs

during the year and `23,271.29 Lakhs in the

immediately preceding financial year.

IX. In their opinion and according to the information and

explanations given to the statutory auditors of the

Holding Company and HMT Machine Tools Ltd, the

companies have no continued defaults in repayment of

their respective dues to the Financial Institutions, banks

or debenture holders. HMT Watches Limited, HMT

International Ltd and HMT Chinar Watches Ltd did not

have dues to banks or Financial Institutions or

debenture holders during the year. HMT Bearings Ltd

has defaulted in repayment of dues with regard to loans

taken from Government. The details of loan defaults

are as follows:

ParticularsPrincipal Interest Total

(` ` ` ` ` in lakhs) (` ` ` ` ` in lakhs) (` ` ` ` ` in lakhs)

Capex Loan from GOI 225.00 430.88 655.88

Loan for salaries & statutory dues from

GOI including VRS compensations 3429.60 3351.92 6781.52

GOI Loan for repayment of Bank Loan 1156.00 857.17 2013.17

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X. According to the information and explanations given to

the statutory auditors of the Holding Company and

Subsidiary Companies, the holding company and its

subsidiary companies incorporated in India have not

given any guarantees for loans taken by others from

financial institutions.

XI. In their opinion and according to the information and

explanations given to the respective statutory auditors,

the Holding Company and its subsidiary companies

incorporated in India have not raised any term loans.

The term loans taken by HMT Watches Limited and

HMT Chinar Watches Ltd from Government of India

through Holding Company were applied for the purpose

for which they were obtained.

XII. According to the information and explanations given to

the statutory auditors of the Holding Company and its

subsidiary companies incorporated in India no

instances of material fraud on or by each company

has been noticed or reported during the course of audit

by the statutory auditors of the Holding Company and

its subsidiary companies incorporated in India.

As per our Report attached

For M/s. DOKANIA S KUMAR & CO.

(Firm Registration No. 322919E)

CHARTERED ACCOUNTANTS

(CA. Sushil Kumar Dokania)

Partner

Membershi No.057020Place: Bangalore

Date: 10/08/2015

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Basis of preparation of financial statements

The financial statements are prepared as of a going concern,

under the historical cost convention, on accrual basis of

accounting and in accordance with the provisions of the

Companies Act, 2013 and comply with the mandatory

Accounting Standards prescribed under Section 133 of

Companies Act 2013, read with Rule 7 of Companies

(Accounts) Rules 2014, the provisions of the Act (to the

extent notified) and guidelines prescribed by the Securities

& Exchange Board of India (SEBI).

Fixed Assets

Fixed Assets are stated at cost of acquisition or construction,

net of Cenvat credit, less accumulated depreciation to date.

Cost includes direct costs and financing costs related to

borrowing attributable to acquisition that are capitalized until

the assets are ready for use.

Land received free of cost from the State Governments has

been nominally valued and incidental expenditure incurred

thereon has been capitalized.

Expenditure on development of land is included in the cost

of land.

Assets taken on Finance Lease are capitalized at fair value

/ NPV / contracted price. Depreciation on the same is

charged at the rate applicable to similar type of fixed assets

as per Accounting Policy on “Depreciation”. If the lease

assets are returnable to the lessor on expiry of lease period,

the same is depreciated over its useful life or lease period,

whichever is shorter.

Lease payments made are apportioned between finance

charges and reduction of outstanding liability in relation to

assets taken on lease.

Lease payments made for assets taken on Operating Lease

are recognized as expense over the lease period.

Expenditure incurred on Reconditioning of plant, machinery

and equipment which increases the future benefits from

the existing asset beyond its previously assessed standard

of performance is included in the Gross Book Value which

results in:

(a) Modification of an item of plant to extend its useful

life, including increase in its capacity;

SIGNIFICANT ACCOUNTING POLICIES FOR CONSOLIDATED FINANCIAL STATEMENTS

(b) Upgrading machine parts to achieve a substantial

improvement in the quality of out-put; and

(c) Adoption of new production processes enabling a

substantial reduction in previously assessed

operating costs.

The cost of an addition or extension to an existing asset

which is of a capital nature and which becomes an integral

part of the existing asset is added to its gross block value.

The expenditure on Reconditioning of plant, machinery &

equipment which do not increase the future benefits from

the existing asset beyond the previously assessed standard

of the performance based on the technical assessment, is

charged off to Revenue.

Items of Capital Assets with WDV of ` 1 lakh and above,

which have been retired from active use, are disclosed at

lower of book value or net realizable value and shown

separately in the Fixed Assets Schedule.

Depreciation

Depreciation on fixed assets is provided on straight line

basis over the useful life of the various assets as prescribed

in Schedule II to the Companies Act, 2013, pro-rata with

reference to the date of addition or deletion. As and when

assets gets fully depreciated, ` 1/- is retained as book

value of the asset. Assets costing less than ` 10,000/-

shall be depreciated to Re.1/- in the year of purchase.

Depreciation on fixed assets is calculated on a pro-rata

basis from the date of such addition or as the case may be

up to the date on which such asset is sold, discarded or

destroyed.

Useful life specified in the Schedule is for whole of the asset.

Where cost of a part (component) of the asset is significant

to total cost of asset and useful life of that part is different

from the useful life of the remaining asset:-

a. If addition / replacement of the part (component)

enhances the useful life / capacity of the asset,

the useful life shall be reassessed & accordingly

depreciation to be provided;

b. If the addition / replacement of the part (component)

does not enhance the useful life / capacity of the

asset, the same shall be charged to P&L.

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Premium for leasehold land is amortized equally over the

period of lease.

Investments

Investments are either classified as current or long-term.

Current investments are carried at lower of cost and fair

value. Long-term investments are carried at cost and

provisions recorded to recognize any decline, other than

temporary, in the carrying value of each investment. Gain

or loss is recognized in the year of sale.

Inventories

Inventories are valued at the lower of cost and net realizable

value. The cost of materials is ascertained by adopting

Weighted Average Cost Method.

Revenue recognition

Sales are set up based on:

Physical delivery of goods to the customer / customer’s

carrier /common carrier, duly supported by invoice, excise

duty paid challan, gate pass, delivery voucher and LR /

GR, in case of ex-works contracts.

LR/GR obtained and endorsed in favour of customer

(consignee ‘self’), in case of FOR destination contracts.

Despatches to dealers/customers in respect of Machines,

Tractors, Watches & Bearings

Sales include Excise Duty but are net of trade discount

and exclude sales tax.

Income in respect of consultancy agreements/contracts is

accounted, based on the ratio of work completed each year

to the total value of the agreements/contracts.

Foreign currency transactions

Transactions in foreign currency are recorded in Indian rupee

by applying to the foreign currency amount the exchange

rate existing at the time of the transaction.

The outstanding balances of monetary items relating to

foreign currency transactions are stated in Indian rupee by

adopting the rate of exchange prevailing at the date of

Balance Sheet. Exchange differences consequent to

reinstatement are credited / charged to revenue.

The gain or loss in the conversion and / or settlement of

liabilities incurred for acquisition of fixed assets is either

credited or charged to revenue during the period such gain

or loss arise.

In the case of forward exchange contracts, the premium ordiscount arising at the inception of the contract is accountedfor over the life of the contract. Exchange differences onsuch a contract are recognized in the statement of profit orloss in the reporting period in which the exchange ratechanges.

Borrowing costs

Borrowing costs are charged to revenue except those which

are incurred on acquisition or construction of a qualifyingasset that necessarily takes substantial time to be readyand until intended use of the said asset, such costs arecapitalized.

Employee Benefits

Provident Fund is provided for, under a defined benefitscheme. The contributions are made to the Trustadministered by the company.

Leave encashment is provided for under a defined benefit

scheme based on actuarial valuation.

Gratuity is provided for, under a defined benefit scheme, tocover the eligible employees, liability being determined onactuarial valuation. Annual contributions are made, to theextent required, to a trust constituted and administered bythe Life Insurance Corporation of India under which thecoverage is limited to Rs. 50,000/- per eligible employee.The balance provision is being retained in the books to

meet any additional liability accruing thereon for paymentof Gratuity.

Settlement allowance is provided for, under a defined benefitscheme, to cover the eligible employees, liability beingdetermined on actuarial valuation.

Pension is provided for under a defined contribution scheme,contributions are made to the Pension Fund administeredby the Government.

Warranty

Warranty provision for contractual obligations in respect of

Machines, Tractors, Watches & Bearings sold is set upbased on the past experience and is provided in the year ofsale.

With regard to turnkey projects implemented by theCompany warranty provision at the rate of 2 percent of thepurchase value is provided.

Special Tools

Expenditure on manufactured and bought out special tools

are amortized equally over a five year period or earlier, if

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scrapped. Individual items costing less than Rs.750/- are

written off fully in the initial year of acquisition / manufacture.

Income Tax

Taxes are determined following the tax effect accounting

method and a provision therefore is recognized. A deferred

tax asset or deferred tax liability is recorded to recognize

the tax effect on timing differences arising on reconciliation

of profit/loss as per financial statements and profit/loss as

per taxation.

Earnings per share

Basic earnings per share is determined by considering the

net profit after tax, inclusive of the post tax effect on

extraordinary items, if any, and the number of shares

outstanding on a weighted average basis.

Government Grants

Government Grants are accounted when there is a

reasonable certainty of their realization. Grants related to

revenue, unless received as compensation for expenses /

losses, are recognized as revenue over the period to which

these are related on the principle of matching costs to

revenue. Grants related to depreciable fixed assets are

adjusted against the gross cost of the relevant assets while

those related to non-depreciable assets are credited to

capital reserve.

Intangible Assets

Intangible assets are capitalized at cost if

(a) It is probable that the future economic benefits that

are attributable to the asset will flow to the

company,

(b) The Company will have control over the assets,

and

(c) the cost of these assets can be measured

realiably.

Technical Know-how

Expenditure on Technical Know-how is recognized as an

Intangible Asset and amortized on straight line method

based on technical assessment for a period not exceeding

ten years. The amortization commences when the asset

is available for use.

Software

The cost of software internally generated / purchased for

internal use which is not an integral part of the related

hardware is recognized as an Intangible Asset and isamortized on straight line method based on technicalassessment for a period not exceeding ten years.

Research and Development Expenditure

Research Phase:

Expenditure on research including the expenditure duringthe research phase of Research & Development Projectsis charged to profit and loss account in the year ofincurrence.

Development Phase:

Expenditure incurred on Development Costs, which relateto Design, Construction and Testing of a chosen alternativefor new or improved material, devices, products, processes,systems or services are recognized as an intangible asset.Such Intangible assets are amortized based on technicalassessment over a period not exceeding ten years usingstraight line method.

Impairment of Assets

As at the end of each Balance Sheet date, the carryingamount of assets is assessed as to whether there is anyindication of impairment. If the estimated recoverableamount is found less than its carrying amount, theimpairment loss is recognized and assets are written downto their recoverable amount.

Others

The amount of .50000/- per head received/receivable fromLIC on account of gratuity claims in respect of employeesseparated under Voluntary Retirement Scheme during theyear is accounted as Other Income.

In respect of employees who are separated other than underVoluntary Retirement Scheme, the Gratuity paid in excessof 50000/-, Earned Leave Encashment (ELE), SettlementAllowance (SA) is debited to the respective provisionaccounts. The provision at the yearend for ELE and SA isrestated as per the actuarial valuation done at the year-end. In case of ELE and SA, any short or excess provisionis charged as expenditure or treated as provision no longerrequired.

Gratuity, Earned Leave encashment, Settlement Allowanceand Lump sum Compensation paid to employees underVoluntary Retirement Scheme shall be fully written off inthe year of incidence.

Expenses incurred in respect of Bonds issued for raisingfunds to meet payments made under the VoluntaryRetirement Scheme are fully written off in the year of

disbursement.

****

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CONSOLIDATED BALANCE SHEET AS AT 31st MARCH 2015

( ` in lakhs )

Note As at As at

No. 31-03-2015 31-03-2014

I EQUITY AND LIABILITIES

1 SHAREHOLDERS’ FUNDS(a) Share Capital 1 186409.16 142035.01(b) Reserves and Surplus 2 (514855.97) (458565.40)

2 SHARE APPLICATION MONEY PENDING ALLOTMENT 3 - 44374.15

3 MINORITY INTEREST 4 19.89 -

4 NON-CURRENT LIABILITIES(a) Long-term Borrowings 5 131159.52 108645.94(b) Deferred Tax Liabilities (Net) 6 121.31 119.15(c) Long-term Provisions 7 20949.58 19875.89

5 CURRENT LIABILITIES(a) Short-term Borrowings 8 4936.32 9699.44(b) Trade Payables 9 6651.70 7278.30(c) Other Current Liabilities 10 203997.83 170369.58(d) Short-term Provisions 11 22511.18 20023.24

TOTAL 61900.52 63855.30

II ASSETS

1 NON-CURRENT ASSETS(a) Fixed Assets

(i) Tangible Assets 12 9352.55 11152.69(ii) Intangible Assets 12 48.60 86.83(iii) Capital Work-in-Progress 12 1302.14 1297.84

(b) Non-Current Investments 13 57.23 72.23(c) Long Term Loans & Advances 14 356.10 329.87

2 CURRENT ASSETS(a) Inventories 15 18157.83 19537.01(b) Trade Receivables 16 10905.75 9185.54(c) Cash and Cash Equivalents 17 12624.39 13464.41(d) Short-term Loans and Advances 18 7414.28 7228.41(e) Other Current Assets 19 1681.65 1500.47

TOTAL 61900.52 63855.30

Significant Accounting Policies.See accompanying notes to the financial statements. 1-52The Accompanying notes form an intergral part of the financial statements

Particulars

For and on behalf of Board As per our Report attached

For M/s. DOKANIA S KUMAR & CO.(F.R.N. 322919E)

CHARTERED ACCOUNTANTS

S. Girish Kumar P. Sivarami Reddy B. K. Subash (CA. Sushil Kumar Dokania)

Chairman & Managing Director Director Company Secretary Partner

Membershi No.057020Place : New DelhiDate : August 10, 2015

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99

REVENUE

I Gross Revenue from Operations 20 29639.67 29088.51 Less: Excise Duty 1975.96 2009.60

Net Revenue from Operations 27663.71 27078.91

II Other Income 21 4719.01 4459.82

III Total Revenue (I + II) 32382.72 31538.73

IV EXPENSESCost of Materials Consumed 22 8981.71 11113.80Purchase of Stock in Trade 23 1543.93 850.68Changes in Inventories of Finished Goods,SIT, WIP & Scrap 24 804.99 (1109.60)Employee Benefits Expense 25 34255.49 28630.41Finance Costs 26 29147.74 26220.30Depreciation & Amortisation Expenses 27 1236.86 1324.36Other Expenses 28 11624.89 20380.79Less: Jobs done for Internal use 29 (354.12) (400.51)

Total Expenses 87241.49 87010.23

V Profit / (Loss) Before Exceptional, Extrordinary items,Adjustment for Prior Period Items and Tax (III - IV) (54858.77) (55471.50)

VI Add : Exceptional Items - Income / (Expenditure) 30 - 30971.63

VII Less : Prior Period Adjustments 31 726.94 95.78

VIII Profit / (Loss) Before Extra ordinary Items and Tax (V - VI - VII) (55585.71) (24595.65)

IX Extra ordinary Items - -

X Profit / (Loss) Before Tax (VIII - IX) (55585.71) (24595.65)

XI Tax Expense

(1) Current Tax 112.07 1898.48

(2) Deferred Tax 2.23 2.13

XII Profit / (Loss) for the Period (X - XI) (55700.01) (26496.26)

XIII Earnings Per Equity Share:

Equites Share of Nominal value of 10/- each

Before Exceptional Items - Basic & Diluted (in Rupees) - (7.30)After Exceptional Items - Basic & Diluted (in Rupees) - (3.22)After Tax - Basic & Diluted (in Rupees) (4.80) (3.48)Number of Shares in computing Earnings Per Shares 1160325355 760350140

Significant Accounting Policies.See accompanying notes to the financial statements. 1-52The Accompanying notes form an intergral part of the financial statements

CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31st MARCH 2015

( ` in lakhs )

Note Year ended Year ended

No. 31-03-2015 31-03-2014Particulars

For and on behalf of Board As per our Report attached

For M/s. DOKANIA S KUMAR & CO.(F.R.N. 322919E)

CHARTERED ACCOUNTANTS

S. Girish Kumar P. Sivarami Reddy B. K. Subash (CA. Sushil Kumar Dokania)

Chairman & Managing Director Director Company Secretary Partner

Membershi No.057020Place : New DelhiDate : August 10, 2015

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(` in lakhs )

Note As at As at

No 31-03-2015 31-03-2014

NOTES FORMING PART OF CONSOLIDATED BALANCE SHEET

Particulars

1 SHARE CAPITAL

AUTHORISED

123,00,00,000 (Previous year 123,00,00,000)Equity Shares of 10/- each 123000.00 123000.00

8,70,00,000 (Previous year 8,70,00,000)Preference Shares of 100/- each 87000.00 87000.00

210000.00 210000.00

ISSUED, SUBSCRIBED & PAID UP

120,40,91,640 (Previous year 76,03,50,140)Equity Shares of 10/- each

{ of the above 3,18,85,900 (Previous year 3,18,85,900) shares are alloted

as fully paid up for consideration other than cash} 120409.16 76035.01

68,43,15,126 i.e., 90% (Previous year 75,18,53,740 i.e., 98.88%)Equity

Shares of 10/- each are held by President of India alongwith nominees

4,43,00,000 (Previous year 4,43,00,000) 3.5% Redeemable Preference Shares of

of 100/- each Entire 3.5% Redeemable Preference Share Capital is held

by President of India 44300.00 44300.00

217,00,000 (Previous year 2,17,00,000) 8% Redeemable Preference Shares

` 100/-each Entire 8% Redeemable Preference Share Capital is held

by President of India 21700.00 21700.00

186409.16 142035.01

1.A During the year 44,37,41,500 Equity Shares were allotted to the President of India on Conversion of Government

of India Loans (Long Term & Current maturity). However, the Shares have not been issued pending in-principle

approval from the National Stock Exchange.

1B. Out of the issued, subscribed & paid-up Equity Shares, of the above 3,18,85,900 (Previous year 3,18,85,900)

shares are alloted as fully paid up for consideration other than cash.

1C. The details of Shareholders holding more than 5% Shares

Name of the Shareholders As at 31-03-2015 As at 31-03-2014

No. of Shares % held No. of Shares % held

Equity Shares:

Hon’ble President Of India 1128056626 93.69 684315126 90

3.5% Redeemable Prefernce Shares

Hon’ble President Of India 44300000 100 44300000 100

8% Redeemable Prefernce Shares

Hon’ble President Of India 21700000 100 21700000 100

1.D The reconciliation of the number of shares outstanding is set out below:

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NOTES FORMING PART OF CONSOLIDATED BALANCE SHEET AS AT 31st MARCH 2015 (` in lakhs )

ParticularsNote As at As at

No 31-03-2015 31-03-2014

No. of Shares No. of Shares

Equity Shares:

Shares at the beginning of the year 760350140 760350140

Add: Shares Issued on account of Conversion of Loan from Govt of India 443741500 -

Shares at the end of the year 1204091640 760350140

3.5% Redeemable Preference Shares

Shares at the beginning of the year 44300000 -

Add: Shares Issued under Revival Plan of HMT Machine Tools Ltd, a Subsidiary - 44300000

Shares at the end of the year 44300000 44300000

8% Redeemable Preference Shares

Shares at the beginning of the year 21700000 -

Add: Shares Issued during in the year - 21700000

Shares at the end of the year 21700000 21700000

2 RESERVES AND SURPLUS

Capital Reserve*

Opening Balance as per last Balance Sheet 2270.82 2270.82

General Reserve

Opening Balance as per last Balance Sheet 16550.97 16550.97

Add: Transfers during the year 30.00

16580.97 16550.97

Balance in Statement of Profit & Loss

Opening Balance as per last Balance Sheet (477387.19) (450874.18)

Add: Share of Profit of Sudmo-HMT Process Engineers (India) Ltd. 4.42 -

Add: adjustments relating to Fixed Assets (Refer Note No.12) (586.09) -

Add: Profit/(Loss) for the year (55738.90) (26513.01)

Net Surplus/(Deficit) in the Statement of Profit & Loss (533707.76) (477387.19)

TOTAL (514855.97) (458565.40)

*Differential amount in the face value of Equity Shares held by Government of Andhra Pradesh and Government

of India in the erstwhile Praga Tools Ltd, which is merged with HMT Machine Tools Ltd and the consideration of

` 1/- to be paid to each of them as per the scheme of Merger sanctioned by BIFR.

3 SHARE APPLICATION MONEY PENDING ALLOTMENT

Towards Conversion of GOI Loans into Equity Share Capital under Revival

Plan of HMT Limited, approved by Govt. of India. (Share Deposit) - 44374.15

TOTAL - 44374.15

4 MINORITY INTEREST 19.89 -

19.89 -

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5 LONG TERM BORROWINGS

SECURED - -

UNSECURED

Loans from Government of India with interest @ 3.5% to 15.5%, repayable

In 1-5 equal annual installments from the date of drawal of loan 130173.02 107659.44

Amount of continuing default 83464.02 lakhs (Previous year 72532.02 lakhs)

Term Loans from Bank with interest @11.5% p.a. upto 31.5.2013 and

15% p.a. till the date of settlement 986.50 986.50

Amount of continuing default Rs.Nil (Previous year Rs.Nil)

TOTAL 131159.52 108645.94

6 DEFERRED TAX LIABILITIES (NET)

Deferred Tax Liability arising on account of Depreciation 121.31 119.15

TOTAL 121.31 119.15

7 LONG TERM PROVISIONS

Provision for Employee Benefits:

Gratuity 17688.40 17303.19

Earned Leave Encashment 2504.03 1843.58

Settlement Allowance 757.15 729.12

TOTAL 20949.58 19875.89

8 SHORT TERM BORROWINGS

SECURED

Cash Credits 4936.32 7989.74

Short Term Loans - 1709.70

4936.32 9699.44

UNSECURED - -

TOTAL 4936.32 9699.44

Cash Credits and Short Term Loans as referred to above, are repayable on demand and are secured by hypothecation

of entire current assets of the Company including inventories and trade receivables, by first charge and collateral

security by way of equitable mortgage by deposit of title deed of the immovable property of the Company ranking

pari passu inter-se the participating banks. (Amount of continuing default Rs.Nil (Previous year .330.39 lakhs)

NOTES FORMING PART OF CONSOLIDATED BALANCE SHEET (` in lakhs )

ParticularsNote As at As at

No 31-03-2015 31-03-2014

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NOTES FORMING PART OF CONSOLIDATED BALANCE SHEET (` in lakhs )

ParticularsNote As at As at

No 31-03-2015 31-03-2014

9 TRADE PAYABLESAcceptances 409.00 248.96Dues towards Goods purchased & Services Received 5220.79 6366.55Dues to Micro, Small & Medium Enterprises 1021.91 662.79

TOTAL 6651.70 7278.30

9.A The details of amounts outstanding to Micro, Small and MediumEnterprises based on information available with the Companiesas under:Principal amount due and remaining unpaid 1021.91 662.79Interest due on above and the unpaid interest 547.43 364.47Interest remaining due and payable in the succeeding year until the dues areactually paid 4.71 3.76Interest paid

9.B Interest accrued and remaining unpaid as at the end of the accounting year

2014-15 388.86 364.472013-14 85.33 60.942012-13 83.43 83.432011-12 72.58 72.582010-11 60.40 60.402009-10 55.24 55.242008-09 31.24 31.242007-08 0.64 0.64

10 OTHER CURRENT LIABILITIESCurrent maturities of long-term debt

Loans from Government of India 18372.22 12915.25Interest accrued and due on borrowings

Government of India Loan 127594.77 103200.46Loan from Bank 1566.08 1418.10

Interest accrued but not due on borrowingsGovernment of India Loan 14307.77 12209.24

OthersAdvance received against sale of land 889.62 889.62Advance received against sales 4254.36 4166.95Sundry Creditors - other dues 11986.79 10316.90Other liabilities 25026.22 25253.06

203997.83 170369.5811 SHORT TERM PROVISIONS

Provision for Employee BenefitsGratuity 3994.70 1701.99Leave Encashment 817.23 495.58Settlement Allowance 252.47 132.06

5064.40 2329.63Provision for Income Tax 1973.18 1900.06Provision for Contingencies 315.60 366.37Provision for Warranty 106.64 168.09Other provisions* 15051.36 15259.09

22511.18 20023.24

* include provision towards 1992 Wage and Salary Revision

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F C

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ED

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(

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lock

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mu

late

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epre

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sD

educ

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alan

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alan

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educ

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epre

ciat

ion

Bal

ance

Bal

ance

Bal

ance

as

atA

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tmen

tsas

at

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the

as a

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at

as a

t

01-0

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2015

01-0

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ear

31-0

3-20

1531

-03-

2015

01-0

4-20

14

ITa

ngib

le A

sset

s

Ow

ned

Ass

ets:

Land

& L

and

Dev

elop

men

t

659.

99

-

-

6

59.9

9

-

-

-

-

65

9.99

659.

99

Bui

ldin

gs

6

987.

72

(18.

39)

-

6

969.

33

4

755.

56

163.

52

120

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5039

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192

9.53

223

2.16

Pla

nt a

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achi

nery

6

0821

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2

1.31

90.

2860

752.

54 5

2807

.45

254.

85

1

052.

91

5411

5.21

6637

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8014

.06

Fur

nitu

re, F

ittin

gs

& O

ffice

App

lianc

es

2

083.

86

2

.40

17.6

0

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68.6

6

1

867.

89

54.

13

4

0.50

1

962.

52

106.

14

215.

97

Tran

spor

t Veh

icle

s

255.

85 -

16

.55

239

.30

23

9.56

(

10.8

2)

4.82

2

33.5

6

5

.74

1

6.29

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b-t

ota

l

708

08.9

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0689

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9670

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461.

68

1

218.

9561

351.

0993

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3

111

38.4

7

Leas

ed A

sset

s:

Land

-Lea

seho

ld

26.

41

-

0.1

6

26.

25

12.

19

-

0.

24

12.4

3

13.

82

14.

22

Tota

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I

708

35.3

4

5

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24.5

9

707

16.0

7

596

82.6

5

461

.68

121

9.19

6136

3.52

935

2.55

1

1152

.69

IIIn

tang

ible

Ass

ets

Des

ign

& P

roto

type

2

7.58

-

27

.58

-

7

.02

(7.

02)

-

-

-20

.56

Tech

. Acq

uisi

tion/

Dev

elop

men

t

88.

36-

-

88.

36

22.

09

-

17.

67

3

9.76

48.

60

66.

27

Tota

l -

II

115.

94

-

27.5

8

88.

36

29.

11

(7.0

2)

1

7.67

39.

76

4

8.60

8

6.83

Tota

l70

951.

28

5.3

2

152

.17

7

0804

.43

5

9711

.76

45

4.66

123

6.86

6

1403

.28

94

01.1

5

112

39.5

2

Pre

viou

s Ye

ar

711

36.1

5

2

0.15

2

05.0

2

709

51.2

8

585

89.3

3

(

201.

93)

132

4.36

5

9711

.76

11

239.

52

Cap

ital W

ork-

in-P

rogr

ess

130

2.14

129

7.84

Not

e:

(a)

Qua

ntum

of l

oss

due

to Im

pairm

ent o

f Ass

ets

as p

er A

S-2

8 - N

il

(b)

Cap

ital W

ork-

in-P

rogr

ess

incl

udes

Mac

hine

ry &

Equ

ipm

ent w

hich

are

in T

rans

it an

d un

der I

nspe

ctio

n or

Ere

ctio

n.

(c)

Pur

suan

t to

enac

tmen

t of t

he C

ompa

nies

Act

, 201

3, th

e co

mpa

ny h

as a

pplie

d th

e es

timat

ed u

sefu

l liv

es a

s sp

ecifi

ed in

Sch

edul

e II.

Acc

ordi

ngly

, the

una

mor

tised

car

ryin

g

amou

nt is

bei

ng d

epre

ciat

ed o

ver t

he re

mai

ning

use

ful l

ives

. The

writ

ten

dow

n va

lue

of F

ixed

Ass

ets

who

se li

ves

wer

e ex

pire

d as

at 1

st A

pril,

201

4 ha

ve b

een

adju

sted

, in

the

open

ing

bala

nce

of S

tate

men

t of P

rofit

and

Los

s A

ccou

nt o

f 5

86.0

9 La

khs.

LA

ND

1T

he C

ompa

ny is

in p

osse

ssio

n of

gift

land

loca

ted

at B

anga

lore

, Pin

jore

, Kal

amas

sery

, Hyd

erab

ad m

easu

ring

267.

49 a

cres

, 822

.67

acre

s, 3

78.8

5 ac

res,

888

.05

acre

s,

nom

inal

ly v

alue

d at

1

/-, g

ifted

by

the

resp

ectiv

e S

tate

Gov

ernm

ents

. The

mut

atio

n of

title

of l

and

in th

e na

me

of th

e co

mpa

ny is

yet

to b

e do

ne. O

ut o

f the

land

loca

ted

at

Ban

galo

re 7

acr

es h

as b

een

encr

oach

ed u

pon

and

the

mat

ter h

as b

een

take

n up

with

the

Gov

t. of

Kar

nata

ka to

shi

ft th

e un

auth

oris

ed o

ccup

ants

.

Par

ticul

ars

Page 111: HMT Ltd (CRD)(050915) · No. 4 of the accompanying Notice dated September 3, 2015. ITEM NO - 4 Shri Vishvajit Sahay (DIN. 06840620), was appointed as Government Nominee Director of

ANNUAL REPORT 2014-201512345678901234567890123456789012123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012

105

2T

he C

ompa

ny is

in p

osse

ssio

n of

leas

ehol

d la

nd m

easu

ring

30 a

cres

at

Aur

anga

bad

out o

f whi

ch 5

acr

es o

f la

nd h

as b

een

encr

oach

ed u

pon.

Fur

ther

, leg

al a

ctio

n is

bei

ng

purs

ued

for r

esto

ratio

n of

the

encr

oach

ed la

nd.

3In

res

pect

of l

ands

at H

yder

abad

, an

area

adm

easu

ring

28.4

0 ac

res

was

leas

ed to

var

ious

Gov

ernm

ent D

epar

tmen

ts a

t Hyd

erab

ad.

Pen

ding

reg

istr

atio

n of

tran

sfer

, the

Com

pany

has

agr

eed

to r

elea

se 1

4.20

acr

es o

f la

nd in

exc

hang

e fo

r 14

.20

acre

s of

land

und

er a

n ex

chan

ge a

gree

men

t w

ith a

Sta

te P

ublic

Sec

tor

Und

erta

king

. T

he

Com

pany

has

als

o le

ased

100

0 sq

. yar

ds o

f lan

d, fo

r whi

ch le

ase

deed

was

exe

cute

d an

d ag

reed

to re

leas

e an

othe

r tw

o ac

res

of la

nd to

AP

Pos

tal D

epar

tmen

t in

Hyd

erab

ad,

the

exec

utio

n of

whi

ch is

pen

ding

. The

Com

pany

has

obt

aine

d st

ay fr

om th

e A

ndhr

a P

rade

sh H

igh

Cou

rt, a

gain

st re

poss

essi

on o

f 106

acr

es a

nd 3

5 gu

ntas

of l

and

by th

e

Gov

ernm

ent o

f And

hra

Pra

desh

. No

final

ity h

as b

een

reac

hed

on th

e pr

opos

al fo

r sur

rend

er o

f 300

acr

es o

f lan

d ow

ned

by th

e C

ompa

ny a

t Hyd

erab

ad, t

o th

e G

over

nmen

t

of A

ndhr

a P

rade

sh, i

n lie

u of

pay

men

t of p

art s

ale

cons

ider

atio

n an

d is

sue

of m

arke

tabl

e tit

le fo

r the

bal

ance

land

.

4In

resp

ect o

f lan

ds a

t Pin

jore

, Har

yana

, the

Sta

te G

over

nmen

t has

issu

ed a

n or

der f

or re

sum

ptio

n of

446

acr

es o

f unu

tilis

ed la

nd, a

gain

st w

hich

the

Com

pany

has

obt

aine

d a

stay

from

the

Hig

h C

ourt

of P

unja

b &

Har

yana

aga

inst

the

said

resu

mpt

ion

orde

r and

the

sam

e is

con

tinui

ng. T

he C

ompa

ny h

as a

gree

d an

d tr

ansf

erre

d ab

out 5

acr

es o

f lan

d

to H

arya

na Ir

rigat

ion

depa

rtm

ent a

t the

ir re

ques

t for

con

stru

ctio

n of

Kau

shal

ya D

am a

nd c

ompe

nsat

ion

for t

he s

ame

is y

et to

be

reco

vere

d p

endi

ng m

utat

ion

of ti

tle o

f lan

d in

Com

pany

�s n

ame,

whi

ch i

s a

subj

ect m

atte

r of l

egal

pro

ceed

ings

bef

ore

the

Pun

jab

& H

arya

na H

igh

Cou

rt.

Fur

ther

, Nat

iona

l Hig

hway

s A

utho

rity

of In

dia

has

acqu

ired

abou

t

11.7

3 ac

res

of la

nd fo

r roa

d w

iden

ing

proj

ect a

nd c

ompe

nsat

ion

for t

he a

cqui

red

land

is a

wai

ted

as th

e m

atte

r reg

ardi

ng m

utat

ion

of ti

tle o

f lan

d in

Com

pany

�s n

ame

is p

endi

ng

befo

re th

e P

unja

b &

Har

yana

Hig

h C

ourt

.

5P

endi

ng fi

nalis

atio

n of

the

rate

s by

the

Gov

ernm

ent o

f Raj

asth

an, p

rovi

sion

for c

onve

rsio

n ch

arge

s, if

any

, pay

able

for c

onve

rsio

n of

Rev

enue

land

for I

ndus

tria

l use

at M

achi

ne

Tool

Uni

t Ajm

er, h

as n

ot b

een

mad

e in

the

acco

unts

as

the

mat

ter i

s su

b-ju

dice

and

exe

cutio

n of

leas

e de

ed is

pen

ding

.

6La

nd a

dmea

surin

g 2.

71 a

cres

has

bee

n le

ased

out

to th

e K

eral

a E

lect

ricity

Boa

rd a

nd P

osta

l aut

horit

ies

in K

alam

asse

ry.

Fur

ther

, HM

T-M

TL

has

leas

ed o

ut la

nd a

dmea

surin

g

5.00

Ha

and

2.50

Ha

to M

/s K

ochi

Met

ro R

ail L

td. f

or a

per

iod

of 2

yea

rs fr

om 6

.6.2

013

to 5

.6.2

015

and

from

1.9

.201

3 to

31.

8.20

15 re

spec

tivel

y, fo

r sto

ckya

rd a

nd fa

bric

atio

n

purp

ose.

How

ever

, DH

I app

rova

l is

awai

ted

with

resp

ect t

o th

e la

nd a

dmea

surin

g 2.

50 H

a.

7In

the

mat

ter r

elat

ing

to 1

95 a

cres

and

33

gunt

as la

nd h

ande

d ov

er to

HM

T M

achi

ne T

ools

Ltd

(HM

T M

TL)

by

the

Gov

t. of

And

hra

Pra

desh

, HM

T M

TL

has

filed

Writ

pet

ition

No.

2001

2 of

200

3 on

the

file

of H

on�b

le H

igh

Cou

rt o

f AP

aga

inst

the

Gov

t of A

ndhr

a P

rade

sh a

nd O

ther

s w

here

in H

MT

MT

L ha

s so

ught

dire

ctio

ns fo

r dem

arki

ng 1

95.3

3 ac

res

of la

nd fo

r han

ding

ove

r the

sam

e to

HM

T M

TL.

Dur

ing

rece

ntly

con

duct

ed s

urve

y by

HM

T M

TL,

it h

as c

ome

to th

e no

tice

that

app

roxi

mat

ely

39 a

cres

of l

and

is n

ot in

the

actu

al

poss

essi

on b

ut p

aym

ent f

or e

ntire

195

.33

acre

s of

land

has

bee

n m

ade

to th

e de

cree

hol

ders

. Out

of t

he a

bove

land

, 600

0 sq

.mts

of l

and

is a

llote

d to

AP

SE

B fo

r set

ting

up o

f 33

KV

Sw

itchi

ng S

tatio

n an

d 33

/11

KV

Ele

ctric

al s

ub s

tatio

n. T

he c

ompe

nsat

ion

paya

ble

by A

PS

EB

is n

ot y

et b

een

dete

rmin

ed. G

HM

C is

sued

a n

otic

e vi

de n

o. 4

1/86

/RW

/TP

S/

GH

MC

/SC

/200

7 da

ted

01-1

2-20

07 to

take

ove

r 238

.86

sq. y

ards

of l

and

for r

oad

wid

enin

g pr

ogra

mm

e un

dert

aken

by

them

out

of t

he 3

000

sq. y

ards

ava

ilabl

e at

Kav

adig

uda,

Sec

unde

raba

d w

ithou

t any

com

pens

atio

n. H

MT

MT

L ha

d pr

otes

ted

for t

his

and

rais

ed a

dem

and

for c

ompe

nsat

ion

for l

and

prop

osed

to b

e ta

ken

over

by

them

for r

oad

wid

enin

g

prog

ram

me

at p

reva

iling

mar

ket r

ate

whi

ch is

pen

ding

.

8In

resp

ect o

f HM

T M

TL,

land

adm

easu

ring

64.6

2 ac

res

has

been

leas

ed o

ut to

Hyd

erab

ad M

etro

Rai

l Cor

pora

tion

for a

per

iod

of 3

yea

rs c

omm

enci

ng fr

om 1

st S

epte

mbe

r 201

2

to 3

1st A

ugus

t 201

5 fo

r a te

mpo

rary

cas

ting

cum

sta

ckin

g ya

rd.

OT

HE

RS

9In

resp

ect o

f HM

T M

TL,

Pla

nt &

Mac

hine

ry in

clud

es 8

item

s of

Fix

ed A

sset

s id

entif

ied

as s

urpl

us a

nd fo

r dis

posa

l, th

e ne

t blo

ck o

f whi

ch is

1

6,80

,779

/-.

10In

one

of t

he U

nits

of t

he C

ompa

ny, s

ome

of th

e as

sets

gro

uped

und

er P

lant

& M

achi

nery

with

WD

V

23/

-, F

urni

ture

, Fix

ture

s &

Offi

ce A

pplia

nces

with

WD

V

22/

- wer

e bu

rnt

durin

g fir

e an

d T

rans

port

Veh

icle

with

WD

V

1/-

was

lost

due

to th

eft,

to b

e w

ritte

n of

f.

NO

TE

S F

OR

MIN

G P

AR

T O

F C

ON

SO

LID

AT

ED

BA

LA

NC

E S

HE

ET

Page 112: HMT Ltd (CRD)(050915) · No. 4 of the accompanying Notice dated September 3, 2015. ITEM NO - 4 Shri Vishvajit Sahay (DIN. 06840620), was appointed as Government Nominee Director of

ANNUAL REPORT 2014-201512345678901234567890123456789012123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012

106

13 NON CURRENT INVESTMENTS

Long Term Investments (Unquoted) - Valued at Cost less Permanent

Dimunition in the value of Investments

TRADE INVESTMENTS - -

In Equity Shares

30,00,000 (Previous year 30,00,000) Ordinary Shares of Naira 1 each

fully paid up in Nigeria Machine Tools Ltd, Nigeria. 171.55 171.55

20,84,050 (Previous year 20,84,050) Equity Shares of 1 each fully

paid up in Gujarat State Machine Tools Corporation Ltd., Bhavnagar. 20.84 20.84

2,94,800 (Previous year 2,94,800) Equity Shares of 10/- each (of which

1,34,000 [Prev. year 1,34,000] Shares at a premium of 140/- each) fully

paid up in Andhra Pradesh Gas Power Corporation Limited, Hyderabad 217.08 217.08

In Equity Shares of Joint Venture

Nil (Previous year 1,50,000) Equity Shares of 10 each fully paid up in

Sudmo HMT Process Engineers (India) Ltd., Bangalore. - 15.00

409.47 424.47

Less: Provision for dimunition in value of Investment

Nigeria Machine Tools Ltd., Nigeria 171.55 171.55

Gujarat State Machine Tools Corporation Ltd, Bhavnagar 20.84 20.84

Andhra Pradesh Gas Power Corporation Ltd, Hyderabad 159.85 159.85

352.24 352.24

Total Non Current Investments 57.23 72.23

Aggregate amount of Unquoted Investemnts 57.23 72.23

14 LONG TERM LOANS AND ADVANCES

Capital Advance

Unsecured Considered Good 356.10 329.87

Unsecured Considered Doubful 7.88 7.88

363.98 337.75

Less:Provision for Doubtful Advance 7.88 7.88

356.10 329.87

15 INVENTORIES*

Raw Materials and components 3601.22 3720.19

Material and components in transit 290.44 564.79

Work-in-progress 10039.81 11490.19

Finished goods 5237.46 6248.08

Stock in Trade 549.40 445.01

NOTES FORMING PART OF CONSOLIDATED BALANCE SHEET (` in lakhs )

ParticularsNote As at As at

No 31-03-2015 31-03-2014

Page 113: HMT Ltd (CRD)(050915) · No. 4 of the accompanying Notice dated September 3, 2015. ITEM NO - 4 Shri Vishvajit Sahay (DIN. 06840620), was appointed as Government Nominee Director of

ANNUAL REPORT 2014-201512345678901234567890123456789012123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012

107

NOTES FORMING PART OF CONSOLIDATED BALANCE SHEET (` in lakhs )

ParticularsNote As at As at

No 31-03-2015 31-03-2014

Goods in Transit 1566.44 -

Stores and spares 1332.96 1381.16

Tools and instruments 802.51 789.96

Scrap 115.49 130.31

23535.73 24769.69

Less: Provision for Non-moving Inventories 5377.90 5232.68

18157.83 19537.01

* Includes Stock with C&F Agents / Contractors / Ancillary units /

Customs / in Bonds / in site

16 TRADE RECEIVABLES*

UNSECURED

Trade receivables outstanding for a period exceeding six months

from the date they are due for payment:

Considered good 4032.72 4231.88

Considered doubtful 14001.51 13890.92

18034.23 18122.80

Others

Considered good 6873.03 4953.66

Considered Doubtful 30.41 -

6903.44 4953.66

Less: Provision for doubtful debts 14031.92 13890.92

10905.75 9185.54

*Debts due by firms or Private Companies in which any Director, - -

Officer is a Partner or a Director or a Member

17 CASH AND CASH EQUIVALENTS

Cash and Cheques on hand 2651.91 58.09

Balance with Banks in Current account 969.61 4269.44

Balance with Banks in Deposit account* 8874.05 9034.13

With Post Office in Savings Bank Accounts** 128.82 102.75

12624.39 13464.41

* Includes

Deposits with maturity of 3 months or less 158.46 140.78

Deposits with more than 12 months maturity 1469.61 1405.98

Deposits held as margin money or security against

guarantees & other commitments 1996.73 1304.22

** Pass Books deposited with Central Excise Authorities.

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108

18 SHORT TERM LOANS AND ADVANCES*

Unsecured - -

ADVANCES RECOVERABLE IN CASH OR IN KIND OR FOR

VALUE TO BE RECEIVED

Secured

Considered Good 263.32 9.49

263.32 9.49

Unsecured

Considered Good # 5919.43 6084.62

Considered Doubtful 942.84 934.98

6862.27 7019.60

Less:Provision for doubtful advances 942.84 934.98

5919.43 6084.62

OTHER ADVANCES

Unsecured

Considered Good

Balance with Collectors of Customs, Central Excise, etc., 33.82 43.40

Deposits 774.20 777.67

Advance Income Tax/TDS Receivable 423.51 313.23

1231.53 1134.30

7414.28 7228.41

*Debts due by firms or Private Companies in which any Director, Officer

is a Partner or a Director or a Member. - -

# Includes advances to suppliers, prepaid expenses, MODVAT Credit to be availed etc.

19 OTHER CURRENT ASSETS

Special Tools 468.17 496.55

Interest on Trade Receivable 5970.24 6190.76

Less: Provision for interest on Trade Receivable 4756.76 5186.84

1213.48 1003.92

1681.65 1500.47

NOTES FORMING PART OF CONSOLIDATED BALANCE SHEET (` in lakhs )

ParticularsNote As at As at

No 31-03-2015 31-03-2014

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109

20 GROSS REVENUE FROM OPERATIONS*

INLAND

Sale of Products

Tractors 4832.84 6241.07

Food Processing Machinery 487.52 738.00

Accessories 176.32 169.73

Sale of Services

Sundry jobs and miscellaneous sales 643.13 813.37

Packing / Forwarding charges 7.59 8.41

6147.40 7970.58

MACHINE TOOLS

Sale of Products

Machine Tools 15007.96 13586.21

Accessories 1909.08 2171.60

Sale of Services

Sale of services 167.67 169.55

Sundry jobs and miscellaneous sales 1663.97 1500.03

Packing/forwarding charges 110.16 97.65

18858.84 17525.04

WATCHES

Sale of Products

Watches 892.79 784.13

Sale of Services

Sale of services 2.68 3.35

Sundry jobs and miscellaneous sales 25.04 48.44

Packing/forwarding charges 13.61 15.36

934.12 851.28

BEARINGS

Sale of Products

Ball & Roller Bearings 1656.23 1631.28

1656.23 1631.28

EXPORTS

Sales & Commission 917.41 520.87

Technical Services 14.74 2.07

Project Works 1110.93 587.39

2043.08 1110.33

TOTAL 29639.67 29088.51

* Nett of Trade Discount

NOTES FORMING PART OF CONSOLIDATED STATEMENT OF PROFIT AND LOSS (` in lakhs )

ParticularsNote Year ended Year ended

No 31-03-2015 31-03-2014

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110

21 OTHER INCOME

Servicing Income 7.92 4.41

Recoveries from Staff/Others 261.91 243.91

Royalties 0.16 4.50

Rent received 1212.67 1056.86

Profit on sale of assets 30.16 49.09

Interest Income

On Bank Deposits 672.28 479.07

Interest from Dealers/Others 200.52 336.94

Dividend from Subsidiaries 7.20 14.40

Provisions no longer required withdrawn 1638.40 1285.30

Grant received from GOI - 17.09

Other non operating income * 687.79 968.25

4719.01 4459.82

* includes Training expenses recovered, disposal of Scrap, Freight & Insurance recoveries

22 COST OF MATERIALS CONSUMED

Raw materials and Components

Opening Stock 3720.19 3859.16

Purchases 8862.74 10974.83

12582.93 14833.99

Less: Closing Stock 3601.22 3720.19

8981.71 11113.80

22.A Particulars of Materials consumed:

Steel 602.51 473.18

Non-ferrous Metals 6.85 14.50

Ferrous Castings 914.01 1035.21

Non-ferrous Castings 44.03 53.05

Forgings 347.05 532.51

Standard parts 2790.51 2197.47

Components 4187.72 6640.37

Others 89.03 167.51

TOTAL 8981.71 11113.80

23 PURCHASES OF STOCK IN TRADE

Purchases of Stock in Trade 1543.93 850.68

1543.93 850.68

NOTES FORMING PART OF CONSOLIDATED STATEMENT OF PROFIT AND LOSS (` in lakhs )

ParticularsNote Year ended Year ended

No 31-03-2015 31-03-2014

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111

NOTES FORMING PART OF CONSOLIDATED STATEMENT OF PROFIT AND LOSS (` in lakhs )

ParticularsNote Year ended Year ended

No 31-03-2015 31-03-2014

24 CHANGES IN INVENTORIES OF FINISHED GOODS, WORK IN PROCESS,

& STOCK IN TRADE

FINISHED GOODS

Closing Balance 5237.46 6248.08

Opening Balance 6248.08 6695.27

1010.62 447.19

GOODS IN TRANSIT

Closing Balance 1566.44 -

Opening Balance - -

(1566.44) -

SCRAP

Closing Balance 115.49 130.31

Opening Balance 130.31 111.70

14.82 (18.61)

WORK IN PROGRESS

Closing Balance 10039.81 11490.19

Opening Balance 11490.19 9962.78

1450.38 (1527.41)

STOCK IN TRADE

Closing Balance 549.40 445.01

Opening Balance 445.01 434.24

(104.39) (10.77)

TOTAL 804.99 (1109.60)

25 EMPLOYEE BENEFIT EXPENSES *

Salaries,Wages and Bonus 22467.38 19290.27

House Rent Allowance 828.99 630.90

Gratuity 5461.35 3845.23

Contribution to PF & FPS 2468.91 2064.22

Deposit Linked Insurance 98.52 46.07

Contribution to ESI 18.02 27.09

Welfare Expenses 2912.32 2726.63

34255.49 28630.41

* Includes

Wages for Repairs to Machinery 799.38 710.46

Wages for Repairs to Building 52.48 51.72

26 FINANCE COSTS

Interest Expense

Government of India Loans 26504.85 23328.98

Cash Credit loans from Banks 1027.59 1120.37

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112

NOTES FORMING PART OF CONSOLIDATED STATEMENT OF PROFIT AND LOSS (` in lakhs )

ParticularsNote Year ended Year ended

No 31-03-2015 31-03-2014

Loans from Bank 147.98 -

HMT Bonds 16.09 334.55

Short Term Loan from Bank - 167.88

Others 1255.06 991.30

Other Borrowing Cost

Finance Charges 19.55 14.42

Bank / Discounting Charges 183.36 220.42

(Gain) / Loss on Foreign curreny transactions (Net) (6.74) 42.38

29147.74 26220.30

27 DEPRECIATION AND AMORTISATION EXPENSE

Depreciation 1219.19 1303.93

Amortisation of Intangible Assets 17.67 20.43

1236.86 1324.36

28 OTHER EXPENSES

28.1 Manufacturing Expenses

Consumption of Stores,Spares,Tools & Pkg.Matls.* 3616.26 3433.73

Power and Fuel 1253.59 1474.37

Excise Duty 228.28 142.79

Repairs to machinery 55.44 61.67

Amortisation of Special Tools 365.53 363.50

Provision for Non Moving Inventories 291.20 346.64

28.2 Selling & Distribution Expenses

Rebate on Sales 149.56 139.99

Selling & Distribution Expenses 8.39 4.42

Advertisement and Publicity 64.42 47.56

Carriage outwards 207.43 234.70

28.3 Establishment Expenses

Rent 115.24 112.43

Rates and Taxes 331.96 405.60

Insurance 51.92 54.41

Water and Electricity 582.12 602.96

Repairs to building 26.35 42.42

Printing and Stationery 60.75 66.29

Training expenses 134.49 81.09

Auditors Remuneration # 10.74 13.20

Provision for loss in value of investment - 325.86

Other Agents Commission 0.87 1.37

Provision for Doubtful Debts,Loans and Advances 1153.12 9403.60

Provision for Contingencies - 34.14

Warranty claims 101.94 180.10

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113

NOTES FORMING PART OF CONSOLIDATED STATEMENT OF PROFIT AND LOSS (` in lakhs )

ParticularsNote Year ended Year ended

No 31-03-2015 31-03-2014

Loss sustained by PF Trust 237.70 236.13

Loss on Assets sold - 0.14

Bad Debts / Advances written off 352.62 269.93

Travelling Expenses 444.81 473.70

Miscellaneous Expenses 1780.16 1828.05

11624.89 20380.79

* Includes Stores and Spares parts for:

Repairs to Machinery 30.02 35.33

Repairs to Building 8.82 1.79

# As Auditor 7.37 6.94

For taxation matters 2.33 2.33

For other services 0.30 0.38

Reimbursement of expenses 0.37 1.12

Service tax 0.37 0.48

Cost Audit Fee & expenses - 1.95

29 JOBS DONE FOR INTERNAL USE

Shop manufactured Special Tools (354.12) (400.51)

(354.12) (400.51)

30 EXCEPTIONAL ITEMS

Income

Interest Waiver on GOI Loans - 24045.31

Withdrawal of Interest on GOI Loans - 8554.14

Interest Waiver on One Time Settleent - 975.40

Guarantee Fee Waiver - 375.92

- 33950.77

Less: Expenses

VRS Compensation - 386.67

Reversal of Income on land sale reversal - 986.41

Interest on Loan from Bank - 1418.10

Guarantee fee expenses - 187.96

- 2979.14

- 30971.63

31 PRIOR PERIOD ADJUSTMENTS (PPA)

Materials 47.43 0.82

Employee benefit expenses 65.72 3.55

Other Expenses 648.47 130.83

761.62 135.20

Less:

Other Income 34.68 39.42

726.94 95.78

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114

NOTES FORMING PART OF CONSOLIDATED STATEMENT OF PROFIT AND LOSS

32 DISCLOSURE REGARDING PROVISION

Provision in respect of present obligations arising out of past events are made in the Accounts based on reasonable

estimates of the obligations. Provision for Warranty is made as per the Accounting Policy.

The details of provision for Warranty claims are furnished below:

(` in Lakhs)

As at As at

31.3.2015 31.3.2014

Opening Balance 168.09 212.20

Additions during the year 76.74 171.43

Total 244.83 383.63

Less: Used during the year

Utilised 72.85 141.94

Withdrawn 65.35 73.60

138.20 215.54

Closing Balance 106.63 168.09

33 DISCLOSURE REGARDING RELATED PARTIES

1 Name of the Company SUDMO HMT Process Engineers (India) Ltd, Bangalore

2 Nature of Relationship Joint Venture Company

(` in Lakhs)

2014-15 2013-14

3 Nature of Transactions

Advances given for expenses during the year 2.40 2.45

Advances reimbursed by the Company - 4.34

4 Outstanding at the year end 4.85 2.45

34 EARNINGS PER SHARE

2014-15 2013-14

i) Net Profit/(Loss) after Tax as per Statement of Profit and Loss

attributable to Equity Shareholders (` in lakhs) (55700.01) (26496.26)

ii) Weighted Average number of Equity Shares used as denominator

for calculating EPS 1160325355 760350140

iii) Basic and Diluted Earnings per Share (`) (4.80) (3.48)

iv) Face Value per Equity Share (`) 10 10

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115

NOTES FORMING PART OF CONSOLIDATED BALANCE SHEET (` in lakhs )

ParticularsNote As at As at

No 31-03-2015 31-03-2014

35 CONTINGENT LIABILITIES

The Company is contingently liable for:

35.A Claims against the Company not acknowledged as debts

I Tax related claims pending in appeal

i) Excise Duty 371.21 589.16

ii) Sales Tax 409.72 459.96

iii) Customs Duty 212.29 207.70

iv) Property Tax 1850.60 1064.25

v) Others 1077.26 135.43

II Non receipt of related Forms against levy of concessional

Sales Tax 7569.45 3064.93

III Employee related claims relating to Lockouts, Back wages, Incentives &

Annual bonus, etc., pending adjudication, to the extent ascertainable. 1140.25 1017.14

IV Various cases relating to defective product, accident causing injuries to

third parties, claims relating to supply of materials etc. 6577.08 5295.24

V Guarantees/Counter Guarantees issued 1921.29 664.93

VI Liability towards interest, penalty/damages as per 7Q and 14B

of Employees Provident Fund and Miscellaneous Provisions Act, 1952 3932.74 5511.24

35.B The Company had deposited 16.00 Lakhs before II Additional Chief Judge,

City Civil Court, Hyderabad against the claim made by M/s. Medvin Hospital

Hyderabad out of said claim the company has acknowledged only 2,69,433/-

as debts 13.31 13.31

35.C Refund to Andhra Pradesh State Government based on the outcome of the appeal

preferred by the Government in EP No. 124/2006 in O. S. 794/92 6.47 6.47

35.D Estimated amount of contracts remaining to be executed on capital account

and not provided for 595.12 225.34

35.E The GOI had released a Plan Assistance of 200 lakhs to the Company during

March 2007 to meet the Capital Expenditure of HMT Watches Ltd, the wholly

owned Subsidiary, in the form of Equity (` 100 lakhs) & Loan (`100 lakhs). In

view of the non utilisation of the funds by the Subsidiary within the stipulated

period, GOI had instructed the Company during December 2009 for refund of

the total Plan Assistance of ` 200 lakhs. Accordingly, the Company has

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116

refunded the Loan amount of 100 lakhs to GOI during February 2010. However,

with regard to refund of Equity portion, since the Company has already issued

10,00,000 Equity Shares of `10 each (` 100 lakhs) in favour of President of

India during April 2007, as per the terms of GOI sanction, the same could not

be carried out, as it would amount to reduction in Share Capital requiring the

approval of the Share Holders and completion of other statutory formalities as

per the Companies Act, 1956 and applicable rules in this regard, and the same

has been communicated to GOI. Further instructions are awaited from GOI on

the same.

35.F Preference Share Capital

The Government of India while approving the Revival Plan of HMT Machine

Tools Ltd (HMT-MTL), a Subsidiary Company, during March 2007, had accorded

sanction for cash infusion of ` 44300 lakhs in the form of 3.5% Preference

Share Capital which was routed through the Company for investment in the

Preference Share Capital in the Subsidiary, to be redeemed after 3 years i.e.

31.3.2010 out of sale of surplus immovable Properties of HMT-MTL.

Since the title deeds in respect of the identified immovable properties are not

mutated in the name of the HMT-MTL, the sale of these properties have been

approved by the Government as part of the Revival Plans of the Company (HMT

Ltd). The Preference Share Capital will be redeemed upon sale of immovable

property.

36 Deferred Tax Asset/Liability

Accounting for Taxes as per Accounting Standard-22. Deferred Tax balance as

at March 31, 2014 comprising the timing difference between the profit as per

financial statements and as per Income Tax is made up of:

Deferred Tax Assets (Net) Opening Balance (119.08) (117.02)

On Depreciation to Fixed Assets (2.23) (2.13)

Deferred Tax Assets (Net) Closing Balance (121.31) (119.15)

37 Inventories include

37.1 Excise Duty paid / payable on Closing Stock of Finished Goods & Scrap.

However, this has no effect on the working results of the Company 417.03 453.53

37.2 Include usable slow/non moving and surplus stores and materials /

work-in-progress / stock-in trade. 588.63 868.22

37.3 Some of the physical verification certificates in respect of stocks at

showrooms / exhibitions / on consignment are awaited.

NOTES FORMING PART OF CONSOLIDATED BALANCE SHEET (` in lakhs )

ParticularsNote As at As at

No 31-03-2015 31-03-2014

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117

NOTES FORMING PART OF CONSOLIDATED BALANCE SHEET (` in lakhs )

ParticularsNote As at As at

No 31-03-2015 31-03-2014

38 Trade Receivables include

38.1 Dues towards erection and commissioning for a period exceeding one year 419.27 130.74

38.2 Amounts withheld towards liquidated damages and interest on advances

claimed/if claimed on delayed supplies. - 563.91

38.3 Dues from parties against whom cases have been filed before various

Courts which are pending. 3430.00 3430.00

39 Advances include

39.1 Amounts recoverable from employees advances, bonus etc pending

adjudication / negotiations 3.95 5.48

39.2 Adhoc payments to employees towards Wage/Salary, DA arrears, if any,

pending adjustment & provision to this extent has been made in the

accounts 3680.55 3889.77

40 Other liabilities include unspecified/excess credits in bank accounts 17.73 17.73

41 The BIFR has sanctioned Rehabilitation Package for HMT MTL envisaging

various sanctions, waivers and exemptions from various Govt. Agencies

and Banks. The Order of BIFR was received by HMT MTL on 13.06.2008.

However, some of the stake holders filed appeal with AAIFR against the

Order of BIFR and final hearing yet to be heard. Pending the outcome of

AAIFR Orders and other statutory formalities to be complied with, no

effect has been given for the disputed waivers and exemptions in the

financial statements of HMT MTL for the period ended 31.3.2015, from

the various stake holders as envisaged in the DRS, approved by BIFR.

42 HMT Bearings Ltd, a Subsidiary Company has been declared as “Sick

Industrial Undertaking” u/s 3(1)(o) of SICA, 1985, on 23rd April 2009.

43 Balances under ‘Trade Receivables’ , ‘Loans & Advances’, ‘Trade

Payables’ and ‘Other Current Liabilities’ are subject to confirmation,

although confirmation has been sought in most of the cases.

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118

44 Sales is net off sales returns

Sales returns in respect of

a Tractors & Spares 0.09 85.90

b Machine Tools 18.81 0.65

45 Employee Benefit expense include

a Provision for Earned Leave encashment made based on Actuarial valuation

of Earned Leave at credit as at the year end. 1726.83 812.26

b Provision for Settlement Allowance made based on Acturial Valuation 268.84 169.27

46 Gratuity has been provided /paid under a Group Gratuity Policy with Life

Insurance Corporation of India. Additional provision made during the year for

full coverage in excess of 50,000/- per employee based on actuarial

valuation by LIC [full coverage in case of HMT Bearings Ltd & HMT

(International) Ltd ]. 5451.87 3845.23

47 Value of Special Tools individually costing less than 750/-

written off during the year. 55.47 58.65

48 Revenue expenditure on Research & Development charged to Statement

of profit & loss 537.16 446.86

49 A Previous year’s figures have been reclassified wherever necessary to

conform to this year’s classification.

49 B Figures of M/s Sudmo HMT Process Engineers (India) Limited,

Bangalore not included in the previous year’s consolidation.

NOTES FORMING PART OF CONSOLIDATED STATEMENT OF PROFIT & LOSS (` in lakhs )

ParticularsNote Year ended Year ended

No 31-03-2015 31-03-2014

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119

50 PRINCIPLES OF CONSOLIDATION OF FINANCIAL STATEMENTS

The consolidated financial statements relate to HMT Limited (‘the Company’) and its Subsidiary Companies. The

Consolidated Financial Statements have been prepared in accordance with Accounting Standard (AS-21)

“Consolidated Financial Statements” notified by Companies (Accounting Standard) Rules, 2014 on the following

basis:

a. The Subisidiary Companies considered in the Financial Statements are as follows

Country of Proportion of ownership

Incorporation Interest

2014-15 2013-14

i) HMT Machine Tools Limited India 100% 100%

ii) HMT Watches Limited India 100% 100%

iii) HMT Chinar Watches Limited India 100% 100%

iv) HMT (International) Limited India 100% 100%

v) HMT Bearings Limited India 99.4% 99.4%

vi) Sudmo-HMT Process Engineers (India) Ltd. India 50%

b. The financial statements of the Company and its subsidiaries are combined on a line-by-line basis by

adding together the book values of like items of assets, liabilities, income and expenditure, after eliminating intra

group balances, intra group transactions and any unrealised profit/loss included therein.

c. The Consolidated Financial Statements have been prepared using uniform accounting policies for like

transactions and are presented to the extent possible in the same manner as the Company’s separate financial

statements.

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120

DISCLOSURE REQUIRED AS PER ACCOUNTING STANDARD - 15 (REVISED)- EMPLOYEE BENEFITS

The Gratuity has been provided by the Company under a Defined Benefit Plan to cover the eligible employees, the

liability being determined on actuarial valuation done by LIC using Projected Unit Credit Method. The Company has

taken a Policy under Group Gratuity Scheme comprising of HMT Limited, HMT Machine Tools Limited, HMT Watches

Limited and HMT Chinar Watches Ltd. with LIC and annual contributions are made to the extent required, to the

separate Trust constituted and administered by the Life Insurance Corporation of India under which the coverage is

limited to ` 50,000/- per eligible employee. In respect of HMT Bearings Ltd. and HMT (International) Ltd the Group

Gratuity Policy has been taken for coverage of 10,00,000/- per eligible employee. In respect of Praga Tools Division,

Hyderabad of HMT Machine Tools Ltd, there exist no Policy under Group Gratuity scheme with LIC.

The actuarial valuation has been made based on the following assumptions:

1 Retirement Age 58 years ( 60 years in HMT Ltd. & HMT (I) Ltd.)

2 Future Salary escalation 7% p.a.

3 Rate of discount 8% p.a.

4 Attrition rate 1 to 3% depending on age

5 Mortality rate LIC (1994-96) Ultimate

The provision for gratuity as on 31-03-2015 for the balance amount based on the above assumptions for over and

above the amount covered under the LIC policy in respect of the Company is 20459.63 lakhs

Defined Benefit Plan

(` in lakhs)

Gratuity (Funded)

2014-15 2013-14

1 Reconciliation of changes in respect of obligations

Present value of obligation as at beginning of year 2204.45 2331.29

Interest cost 176.36 186.50

Current Service Cost 11.43 19.03

Benefits Paid 183.38 295.01

Acturial (gain)/loss on obligations (167.38) (37.36)

Present value of obligation as at end of year 2041.48 2204.45

2 Reconciliation of changes in the fair value of plan assets

Fair value of plan assets at beginning of year 3231.92 2827.92

Expected return on plan assets 285.46 248.15

Contributions 32.00 450.86

Benefits paid 183.38 295.01

Actuarial Gain / (Loss) on Plan assets - -

Fair value of plan assets at the end of year 3366.00 3231.92

3 Reconciliation of fair value of plan assets

Fair value of plan assets at beginning of year 3231.92 2827.92

Actual return on plan assets 285.46 248.15

Contributions 32.00 450.86

Benefits Paid 183.38 295.01

Fair value of plan assets at the end of year 3366.00 3231.92

Funded status 1324.52 1027.47

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121

DISCLOSURE REQUIRED AS PER ACCOUNTING STANDARD - 17- SEGMENT REPORTING

I Primary Segment information: (` in lakhs)

Particulars Machine Tools Watches Tractors Bearings Exports Sudmo-HMT Total

1 Segment Revenue

- External Turnover 18858.84 934.12 6147.40 1656.23 2043.08 - 29639.67

- Intra Segment Turnover - - - - - - -

- Inter Segment Turnover - - - - - - -

Gross Turnover 18858.84 934.12 6147.40 1656.23 2043.08 - 29639.67

Less: Excise Duty 1644.00 30.87 119.05 182.04 - - 1975.96

Net Turnover 17214.84 903.25 6028.35 1474.19 2043.08 - 27663.71

2 Segment Result before interest

PPA, EOI & Taxes (10241.56) (7587.18) (7819.24) (174.49) 110.09 1.35 (25711.03)

Interest 3134.66 22632.30 1835.62 1600.73 (55.58) 0.01 29147.74

Profit before Exceptional, Extra (13376.22) (30219.48) (9654.86) (1775.22) 165.67 1.34 (54858.77)

Oridinary items, PPA and Taxes

Exceptional Items - - - - - - -

Prior period adjustments (PPA) 117.44 605.40 1.80 2.30 - - 726.94

Profit before Extra Oridinary Items (13493.66) (30824.88) (9656.66) (1777.52) 165.67 1.34 (55585.71)

Extra Ordinary Items

Profit/(Loss) before Tax (13493.66) (30824.88) (9656.66) (1777.52) 165.67 1.34 (55585.71)

Current Tax 111.66 0.41 112.07

Deferred Tax 2.23 - 2.23

Profit/(loss) after Tax (13493.66) (30824.88) (9656.66) (1777.52) 51.78 0.93 (55700.01)

3 Other information

Segment Assets 32859.50 8049.69 13287.12 3016.58 4662.78 24.85 61900.52

Segment Liabilites 71524.66 255708.70 47477.40 13928.19 1688.41 0.08 390327.44

Capital Expenditure 1.35 0.00 3.23 0.00 0.74 - 5.32

Depreciation 868.53 66.32 271.35 16.03 14.63 - 1236.86

Non Cash Expenses

other than depreciation

Note: As per Accounting Standard on Segment Reporting (AS-17) notified by Companies (Accounting Standards)

Rules, 2014, the Company has reported segments information on Consolidated basis (including businesses

conducted through its Subsidiaries)

II Secondary Segment Information: (` in lakhs)

1. Segment Revenue - External Turnover 3. Segment Liabilities

- Within India 27596.59 - Within India 390327.44

- Outside India 2043.08 - Outside India -

Total 29639.67 Total 390327.44

2. Segment Assets 4. Segment Capital Expenditure

- Within India 61900.52 - Within India 5.32

- Outside India - - Outside India -

Total 61900.52 Total 5.32

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122

(` in lakhs)

Year ended Year ended

31.03.2015 31.03.2014

A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit /(Loss) Before Tax and Extra-ordinary Items (55585.71) (24595.65)

Adjustment for:

Depreciation 1236.86 1,324.36

Exceptional Items - Interest Wavier etc., - (31358.30)

Profit on Sale of Fixed Assets (net) (30.16) (48.95)

Amortisation of Special Tools 365.53 363.50

Foreign Exchange (net) (6.74) 42.38

Interest debited (Net) 28281.68 25127.07

Dividend received (7.20) (14.40)

Provision for Obsolescence, Doubtful debts, Advances (194.08) 29645.89 8,824.94 4260.60

Operating Profit Before Working Capital Changes (25939.82) (20335.05)

Adjustment for:

(Increase)/Decrease in Trade & Other Receivables (1971.12) 1346.52

(Increase)/Decrease in Inventories 1233.96 (927.46)

(Increase)/Decrease in Other Current Assets 83.89 (135.00)

Increase/(Decrease) in Trade payables 4462.47 3809.20 3373.31 3657.37

Cash Generated From Operations (22130.62) (16677.68)

Direct Taxes paid (149.28) (307.26)

Cash Flow Before Extra - ordinary Items (22279.90) (16984.94)

Extra-ordinary Items - -

NET CASH FROM OPERATING ACTIVITIES (22279.90) (16984.94)

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets (9.62) (23.02)

Sale proceeds of Fixed Assets 30.34 52.04

Sale of Investments - -

Dividend Received 7.20 14.40

Interest Received 672.28 479.07

NET CASH USED IN INVESTING ACTIVITIES 700.20 522.49

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH 2015

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123

Note: 1) Above statement has been prepared under the Indirect method as set out in notified AS 3 - Cash Flow Statement

2) Cash and Cash Equivalents has been considered as per Note No.B17.

3) Opening Cash and Cash Equivalents as on 1-4-2014 includes Rs. 39.17 lakhs iro Sudmo-HMT Process Engineers (India) Ltd.

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH 2015

(` in lakhs)

Year ended Year ended

31.03.2015 31.03.2014

C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from Issue of Share Capital - 66074.15

Proceeds from Long Term/Short Term Borrowings 27943.75 13252.01

Repayment of Long Term/Short Term Borrowings (4736.32) (51557.52)

Repayment of Finance Lease Liabilities - -

Exchange Difference (net) 6.74 (42.38)

Dividends paid - -

Interest Paid (2513.66) (3322.45)

NET CASH USED IN FINANCING ACTIVITIES 20700.51 24403.81

NET INCREASE /(DECREASE) IN CASH AND CASH EQUIVALENTS (879.19) 7941.36

CASH AND CASH EQUIVALENTS AS AT 1ST APRIL 13503.58 5523.05

(Opening Balance)

CASH AND CASH EQUIVALENTS AS AT 31ST MARCH 12624.39 13464.41

(Closing Balance)

INCREASE /(DECREASE) IN CASH AND CASH EQUIVALENTS (879.19) 7941.36

For and on behalf of Board As per our Report attached

For M/s. DOKANIA S KUMAR & CO.(F.R.N. 322919E)

CHARTERED ACCOUNTANTS

S. Girish Kumar P. Sivarami Reddy B. K. Subash (CA. Sushil Kumar Dokania)

Chairman & Managing Director Director Company Secretary Partner

Membership No.057020Place : New DelhiDate : August 10, 2015

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124

FINANCIAL INFORMATION RELATING TO SUBSIDIARY COMPANIES OF HMT LIMITED FORTHE YEAR ENDED 31st MARCH 2015

Sl. HMT HMT HMT HMT HMT Sudmo-HMT

No. Particulars Machine Watches Chinar Bearings (International) Process Engi-

Tools Ltd Ltd Watches Ltd Ltd Ltd neers (India) Ltd.

a) Capital 71959.91 649.01 166.01 3770.91 72.00 30.00

b) Reserves & Surplus (111207.18) (251209.86) (58685.76) (14822.20) 3139.11 4.88

c) Total Assets 32859.50 7407.93 641.76 3016.58 4662.78 24.85

d) Total Liabilities 71524.66 205066.29 50642.41 13928.19 1688.41 0.08

e) Investments - - - 41.15 - -

f) Turnover 18858.84 843.63 90.49 1656.23 2043.08 -

g) Profit/(Loss) before Taxation (13493.66) (25920.26) (4904.62) (1777.52) 165.67 1.34

h) Provision for Taxation - - - - 113.89 0.41

i) Profit/(Loss) after Taxation (13493.66) (25920.26) (4904.62) (1777.52) 51.78 0.93

j) Proposed Dividend (%) Nil Nil Nil Nil 20% Nil

(` in lakhs)